This has been a heavy snow year with
temperatures slightly above zero most days
I read where global warming brings on more moisture in the air
Hence the world should expect more rain and flooding
And where we live this means more record-setting snow depths
Depths that are often too much for my snow blower to handle
Then I call my snow plow man
Video taken with my cool sunglasses
http://www.cs.trinity.edu/~rjensen/temp/2010JensenSnowPlow.3gp

Below is a shot of the south edge of the
parking area behind our cottage

Online Video, Slide Shows, and Audio
In the past I've provided links to various types of music and video available
free on the Web.
I created a page that summarizes those various links ---
http://www.trinity.edu/rjensen/music.htm

Ad*Access ---
http://library.duke.edu/digitalcollections/adaccess/
The Duke University Libraries has an extensive physical and online collection of
advertisements that appeared in magazines and newspapers in the U.S. and Canada
from 1911-1955. The Ad*Access collection focuses on advertisements in five main
subject areas: Radio, Television, Transportation, Beauty and Hygiene, and World
War II.

Difficult-to-read fonts make for better
learning, according to scientists.

The finding is about to be published in
the international journal Cognition.

Researchers at Princeton University
employed volunteers to learn made-up information about different types of
aliens - and found that those reading harder fonts recalled more when tested
15 minutes later.

They argue that schools could boost
results by simply changing the font used in their basic teaching materials.
Hard to digest

The 28 volunteers in the Princeton study
were given 90 seconds to try to memorise a list of seven features for three
different species of alien.

The idea was to re-create the kind of
learning in a biology class. Aliens were chosen to be sure that none of the
volunteers' prior knowledge interfered with the results.

One group was given the lists in 16-point
Arial pure black font, which is generally regarded to be easy and clear to
read. Continue reading the main story The alien test An extract from the
test used by Princeton University, showing lists of features about made-up
aliens in Arial and Comic Sans MS fonts

An extract from the Princeton University
test The text at the top is in Arial; the bottom is in Comic Sans MS
Volunteers were able to remember more when the information was written in
the bottom font, or in the Bodoni MT font

Source: Princeton University

The other had the same information
presented in either 12-point Comic Sans MS 75% greyscale font or 12-point
Bodoni MT 75% greyscale.

The volunteers were distracted for 15
minutes, and then tested on how much they could remember.

Researchers found that, on average, those
given the harder-to-read fonts actually recalled 14% more.

They believe that presenting information
in a way that is hard to digest means a person has to concentrate more, and
this leads to "deeper processing" and then "better retrieval" afterwards.

It is an example of the positive effects
of what scientists call "disfluency".

"Disfluency is just a subjective feeling
of difficulty associated with any mental task," explained psychology Prof
Daniel Oppenheimer, one of the co-authors of the study.

"So if something is hard to see or hear,
it feels disfluent... We'd found that disfluency led people to think harder
about things.

"When we found that in the lab, we were
very excited, because it has obvious implications for the classroom."

Continued in article

Jensen Comment
I wonder if the same reasoning also applies to content itself in cases and
problems. The illustrations in Appendices A and B of the original FAS 133 are
notoriously difficult. These illustrations taught be more about accounting for
derivative financial instruments and hedging activities more than any other
source of my learning of how to account for these complex contracts. Sadly,
these illustrations were left out of the FASB's Codification Database. I wonder
if it was because they're deemed too difficult.

It was most certainly extremely difficult for me to learn and extend these
complicated illustrations. But if I had not studied and extended these difficult
examples I would've never learned nearly as much about the wonders of FAS 133
and its extending amendments.

I'm not in favor of simplifying standards and textbooks on the theory that
they're too difficult for students. And I'm certainly glad that watering down
content is not the guiding principle in medical schools. The students that get
left behind maybe should be left behind rather than make it easier to
specialize.

You're more respected if you really, really understand very technical
content. Learning from watered down sources diminishes this respect unless you
one day move into the tough reading, cases, illustrations, and problems. You're
respected even more if you can extend this tough material in meaningful ways.

Jensen Comment
Finland's economy can best be described as a Nordic (Mixed) Model ---
http://en.wikipedia.org/wiki/Nordic_model
There's relatively low corruption, strict property right and contract
enforcement, and free trade. At the same time Finland's taxation is among the
very highest in the world with a typical Nordic welfare system. Universal
education and health care are outstanding. The Finnish language is one of the
most difficult in the world, and Finland has not been burdened with immigration
and ethnic strife found in most other nations. There are unfunded entitlements,
but on a relative scale Finland does not face the entitlements crises of the
U.S., Japan, Germany, France, and the U.K. Finland is heavily dependent upon
exports and is one of the leading suppliers of electronic goods in Europe.

Success of all the highly-taxed Nordic counties suggests that the United
States could live with higher taxation to cover trillion-dollar deficits.
Finland is perhaps a better test of the Nordic model than Norway since Norway is
blessed with oil wells. Sweden, Norway, and Denmark are now bothered by more
ethnic strife than Finland.

Some things that the above rankings do not tell us is the fragility of some
economies in the Top 25 shown above. For example, precarious debt levels and
deficits are threatening quality of life in Ireland, Spain, France, and Italy.
It seems ludicrous to rank solid-Singapore below or even near some of the
teetering European economies and the debt-ridden the United States.

Finland's heritage and language are vastly different from its Nordic
neighbors. The language and culture are rooted more in Hungary and Baltic
regions rather than in blond Arian Germany. My Swedish and Norwegian friends
jokingly tell me that Finland really isn't part of Scandinavia.

Alcoholism
Like other nations bordering the Arctic Circle, Finland has a relatively high
alcoholism rate, perhaps even higher than its Nordic neighbors. This may
also explain why Finland is probably the least tolerant nation in the world in
terms of drunk driving. Finland only ranks ninth (85 liters per person and lower
than rates in Denmark, Belgium, the U.K., Austria, Australia, Germany, Ireland,
and the Czech Republic) in the world in terms of beer consumption, but like
Russia the alcoholic beverage of choice in Finland is the mind-numbing vodka ---
http://www.cnbc.com/id/26789471/Top_20_Beer_Drinking_Countries?slide=13

People on the streets of Finland are known for not looking strangers in the
eye or even acknowledging strangers passing by. I was informed about this before
visiting Finland and later found it to be true. But in their homes they are warm
and friendly. English speaking seemed higher to me in Finland than in in other
Nordic countries and in continental Europe (Holland is a notable exception).

THE fear that Greece's sovereign-debt crisis might
presage similar episodes elsewhere in the euro zone has been borne out. In
November, Ireland joined Greece in intensive care, becoming the first
euro-zone country to apply for funds from the rescue scheme agreed in May
2010 in concert with the IMF. Sovereign-bond spreads (the extra interest
compared with bonds issued by Germany, the safest credit) have risen sharply
in other euro-zone countries, notably Portugal, but also in Spain. Promises
to tackle budget deficits through public spending cuts and tax increases
have offered little reassurance to bondholders, who know that austerity will
hold back already-weak GDP growth.

The interactive graphic above (updated January 12th
2011) illustrates some of the problems that the European economy faces. GDP
picked up in most countries through 2010 but there were marked differences
in performance. Germany was especially sprightly: its economy rose by almost
4% in the year to the third quarter. But GDP in Greece has crashed under the
weight of austerity; Ireland has yet to emerge convincingly from a deep
recession; and Spain’s economy is barely growing. It is notable that GDP
countries outside the euro, such as Britain, Poland and especially Sweden
grew at a faster rate than the euro-zone average in the year to the third
quarter.

In the first of three articles on the euro zone’s
sovereign-debt woes, we present our estimate of the burdens on the currency
club’s four most troubled members.

THE euro zone’s strategy for tackling its
sovereign-debt crisis is failing. A makeshift scheme was put in place in May
to help countries that cannot otherwise borrow at tolerable interest rates.
That lowered but did not remove the risk that a country may default for want
of short-term funds. But the bond market’s nerves have been shredded again
by the likelihood that from 2013, when a permanent bail-out mechanism is due
to be in place, it will be easier to restructure an insolvent country’s
debts. More worrying still for private investors, this seems set to give
official creditors preference over others.

As a result, bail-outs are making private investors
less rather than more keen to hold a troubled country’s bonds. As old debts
are refinanced and new deficits funded by the European rescue pot and the
IMF, the share of such a country’s debt held by official sources will
steadily rise. That will leave a shrinking pool of private investors to bear
losses if debts are restructured. And the smaller that pool becomes, the
larger the loss that each investor will have to accept. Bond purchases by
the European Central Bank (ECB) aimed at stabilising markets have further
diminished the stock in private hands.

This perverse dynamic argues for a restructuring of
insolvent countries’ debts sooner rather than later. But when is a debt
burden too heavy to be borne? A first indicator against which to make that
judgment is the ratio of gross public debt to GDP. Most rich economies,
including the euro area’s most troubled, have large budget deficits and so
will be adding to their debts for years. Today’s toll is not so important.
What matters is how big the debt burden will be when it stabilises.

THERE’S SOMETHING peculiarly apt about the fact
that the current European crisis began in Greece. For Europe’s woes have all
the aspects of a classical Greek tragedy, in which a man of noble character
is undone by the fatal flaw of hubris.

. . .

The answer, unfortunately, was that currency unions
have costs as well as benefits. And the case for a single European currency
was much weaker than the case for a single European market — a fact that
European leaders chose to ignore.

. . .

What does this have to do with the case for or
against the euro? Well, when the single European currency was first
proposed, an obvious question was whether it would work as well as the
dollar does here in America. And the answer, clearly, was no — for exactly
the reasons the Ireland-Nevada comparison illustrates. Europe isn’t fiscally
integrated: German taxpayers don’t automatically pick up part of the tab for
Greek pensions or Irish bank bailouts. And while Europeans have the legal
right to move freely in search of jobs, in practice imperfect cultural
integration — above all, the lack of a common language — makes workers less
geographically mobile than their American counterparts.

. . .

In Greece the story is straightforward: the
government behaved irresponsibly, lied about it and got caught.During the years of easy borrowing, Greece’s
conservative government ran up a lot of debt — more than it admitted.
When the government changed hands in 2009, the
accounting fictions came to light; suddenly it was revealed that Greece had
both a much bigger deficit and substantially more debt than anyone had
realized. Investors, understandably, took flight.

. . .

Toughing it out: Troubled European economies could,
conceivably, reassure creditors by showing sufficient willingness to endure
pain and thereby avoid either default or devaluation. The role models here
are the Baltic nations: Estonia, Lithuania and Latvia. These countries are
small and poor by European standards; they want very badly to gain the
long-term advantages they believe will accrue from joining the euro and
becoming part of a greater Europe. And so they have been willing to endure
very harsh fiscal austerity while wages gradually come down in the hope of
restoring competitiveness — a process known in Eurospeak as “internal
devaluation.”

. . .

In any case, the odds are that the current
tough-it-out strategy won’t work even in the narrow sense of avoiding
default and devaluation — and the fact that it won’t work will become
obvious sooner rather than later. At that point, Europe’s stronger nations
will have to make a choice.

It has been 60 years since the Schuman declaration
started Europe on the road to greater unity. Until now the journey along
that road, however slow, has always been in the right direction. But that
will no longer be true if the euro project fails. A failed euro wouldn’t
send Europe back to the days of minefields and barbed wire — but it would
represent a possibly irreversible blow to hopes of true European federation.

So will Europe’s strong nations let that happen? Or
will they accept the responsibility, and possibly the cost, of being their
neighbors’ keepers? The whole world is waiting for the answer.

Jensen Comment
Joe's logic seems to overlook one criticism that my students repeatedly hit me
with in 40 years of teaching. Over and over I heard the complaint that:"Your course is only one of five courses that I'm taking
this semester. I can't devote all my time to getting an A in your course and
fail my other four courses. I have projects, examinations, and tons of reading
in my other courses. Can't you ease up a lot?"

Of course if somebody gave away $10 million to a student for earning an A in
my course the student most likely would totally neglect the other four courses.
At resident universities like Trinity University, students must take a minimum
number of courses (I think it's now four courses) such that students are not
allowed to only take one course except in very unusual circumstances. I think
that most students would view three or four F grades as a pretty cheap price for
a high probability of getting $10 million if they devoted 16 hours 24/7 toward
just getting an A in my course.

It's not clear that even with 16 hours a day 24/7 that all of my students
would earn an A grade. Some students are neither efficient nor effective no
matter how much time they put into studying. They could, of course, hire quality
tutors ten hours a day who could perhaps take up the slack, but I'm not sure
this slack is all due to lack of talent on the part of students unless talent is
equated with lower ability to concentrate.

I do agree that most my students over 40 years probably could've earned A
grades in my courses if they truly worked 16 hours a day in a concentrated
effort to earn an A from me. Certainly many of my students earned A grades with
a whole lot less time and less effort and no tutors. And I don't think this was
all due to nature (talent) relative to effort. Most A-grade students are more
efficient and effective with their time apart from their raw talents.

Most of my teaching was in advanced courses such that the weaker,
disorganized, and partying students were filtered out before they ever met me.
By the time I met these students they were hell-bent on entry into their
accounting careers. Hence I generally did not have to work with unmotivated
students, but there were always a few who managed to mess up their lives after
three or more years of college. And even my best students still had four other
courses where they also wanted A grades.

In our relatively small accounting program at Trinity we did do some things
to ease the pressure on students, especially students in the masters program.
Instructors tried to coordinate scheduled examinations and project due dates so
that students did not get hit with everything being due at once. This was more
difficult to coordinate in the undergraduate program.

Over the course of my 40 years of teaching I saw a marked trend of students
pressuring me to give higher grades. Forty years ago a C grade was still a
passing grade. In today's environment for getting internships, job offers, and
admission to graduate school a C grade is tantamount to an F grade. This is the
case in most universities. In 1940 the average grade at Harvard was a C grade.
Look at Harvard's undergraduate grade distribution in the 21st Century:

In recent weeks, editors at a respected
psychologyjournal have been taking heat from
fellow scientists for deciding to accept a research report that claims to
show the existence of extrasensory perception.

The report, to be published this year in
The Journal of Personality and Social Psychology,
is not likely to change many minds. And the scientific critiques of the
research methods and data analysis of its author, Daryl J. Bem (and the peer
reviewers who urged that his paper be accepted), are not winning over many
hearts.

Yet the episode has
inflamed one of the longest-running debates in science. For decades, some
statisticians have argued that the standard technique used to analyze data
in much of social science and medicine overstates many study findings —
often by a lot. As a result, these experts say, the literature is littered
with positive findings that do not pan out: “effective” therapies that are
no better than a placebo; slight biases that do not affect behavior;
brain-imaging correlations that are meaningless.

By incorporating statistical techniques that are
now widely used in other sciences —
genetics, economic modeling, even wildlife
monitoring — social scientists can correct for such problems, saving
themselves (and, ahem, science reporters) time, effort and embarrassment.

“I was delighted that this ESP paper was accepted
in a mainstream science journal, because it brought this whole subject up
again,” said James Berger, a statistician at
Duke University. “I was on a mini-crusade about
this 20 years ago and realized that I could devote my entire life to it and
never make a dent in the problem.”

In recent weeks, editors at a respected
psychologyjournal have been taking heat from
fellow scientists for deciding to accept a research report that claims to
show the existence of extrasensory perception.

The report, to be published this year in
The Journal of Personality and Social Psychology,
is not likely to change many minds. And the scientific critiques of the
research methods and data analysis of its author, Daryl J. Bem (and the peer
reviewers who urged that his paper be accepted), are not winning over many
hearts.

Yet
the episodehas inflamed one of the
longest-running debates in science. For decades, some statisticians have
argued that the standard technique used to analyze data in much of social
science and medicine overstates many study findings — often by a lot. As a
result, these experts say, the literature is littered with positive findings
that do not pan out: “effective” therapies that are no better than a
placebo; slight biases that do not affect behavior; brain-imaging
correlations that are meaningless.

By incorporating statistical techniques that are
now widely used in other sciences —
genetics, economic modeling, even wildlife
monitoring — social scientists can correct for such problems, saving
themselves (and, ahem, science reporters) time, effort and embarrassment.

“I was delighted that this ESP paper was accepted
in a mainstream science journal, because it brought this whole subject up
again,” said James Berger, a statistician at
Duke University. “I was on a mini-crusade about
this 20 years ago and realized that I could devote my entire life to it and
never make a dent in the problem.”

The statistical approach that has dominated the
social sciences for almost a century is called significance testing. The
idea is straightforward. A finding from any well-designed study — say, a
correlation between a personality trait and the risk of depression — is
considered “significant” if its probability of occurring by chance is less
than 5 percent.

This arbitrary cutoff makes sense when the effect
being studied is a large one — for example, when measuring the so-called
Stroop effect. This effect predicts that naming the color of a word is
faster and more accurate when the word and color match (“red” in red
letters) than when they do not (“red” in blue letters), and is very strong
in almost everyone.

“But if the true effect of what you are measuring
is small,” said Andrew Gelman, a professor of statistics and political
science at
Columbia University, “then by necessity anything
you discover is going to be an overestimate” of that effect.

Consider the following experiment. Suppose there
was reason to believe that a coin was slightly weighted toward heads. In a
test, the coin comes up heads 527 times out of 1,000.

Is this significant evidence that the coin is
weighted?

Classical analysis says yes. With a fair coin, the
chances of getting 527 or more heads in 1,000 flips is less than 1 in 20, or
5 percent, the conventional cutoff. To put it another way: the experiment
finds evidence of a weighted coin “with 95 percent confidence.”

Yet many statisticians do not buy it. One in 20 is
the probability of getting any number of heads above 526 in 1,000 throws.
That is, it is the sum of the probability of flipping 527, the probability
of flipping 528, 529 and so on.

But the experiment did not find all of the numbers
in that range; it found just one — 527. It is thus more accurate, these
experts say, to calculate the probability of getting that one number — 527 —
if the coin is weighted, and compare it with the probability of getting the
same number if the coin is fair.

Statisticians can show that this ratio cannot be
higher than about 4 to 1, according to Paul Speckman, a statistician, who,
with Jeff Rouder, a psychologist, provided the example. Both are at the
University of Missouriand said that the simple
experiment represented a rough demonstration of how classical analysis
differs from an alternative approach, which emphasizes the importance of
comparing the odds of a study finding to something that is known.

The point here, said Dr. Rouder, is that 4-to-1
odds “just aren’t that convincing; it’s not strong evidence.”

And yet classical significance testing “has been
saying for at least 80 years that this is strong evidence,” Dr. Speckman
said in an e-mail.

The critics have been crying foul for half that
time. In the 1960s, a team of statisticians led by Leonard Savage at the
University of Michiganshowed that the classical
approach could overstate the significance of the finding by a factor of 10
or more. By that time, a growing number of statisticians were developing
methods based on the ideas of the
18th-century English mathematician Thomas Bayes.

Bayes devised a way to update the probability for a
hypothesis as new evidence comes in.

So in evaluating the strength of a given finding,
Bayesian (pronounced BAYZ-ee-un) analysis incorporates known probabilities,
if available, from outside the study.

It might be called the “Yeah, right” effect. If a
study finds that kumquats reduce the risk of heart disease by 90 percent,
that a treatment cures alcohol addiction in a week, that sensitive parents
are twice as likely to give birth to a girl as to a boy, the Bayesian
response matches that of the native skeptic: Yeah, right. The study findings
are weighed against what is observable out in the world.

In at least one area of medicine — diagnostic
screening tests — researchers already use known probabilities to evaluate
new findings. For instance, a new lie-detection test may be 90 percent
accurate, correctly flagging 9 out of 10 liars. But if it is given to a
population of 100 people already known to include 10 liars, the test is a
lot less impressive.

It correctly identifies 9 of the 10 liars and
misses one; but it incorrectly identifies 9 of the other 90 as lying.
Dividing the so-called true positives (9) by the total number of people the
test flagged (18) gives an accuracy rate of 50 percent. The “false
positives” and “false negatives” depend on the known rates in the
population.

This week, MIT’s
OpenCourseWare project launchedOCW
Scholar, a new series of courses “designed for
independent learners who have few additional resources available to them.”
To date, MIT has given students access to isolated materials from MIT
courses. Now, with this new initiative, lifelong learners can work with a
more rounded set of resources.
OWC
Scholartakes video lectures, homework problems,
problem solving videos, simulations, readings, etc., and stitches them into
a structured curriculum. Perfect for the self-disciplined student.

Below we have listed
the first five courses in theOWC
Scholarcollection. (They’re entirely free.) Fast
forward three years and you will find 20 courses online, says MIT. All will be
added to our big list ofFree
Online Courses.

The Brunel Lecture Series on Complex
Systems, presented by MIT's Engineering Systems Division (ESD), was made
possible by funds assembled and underwritten by Frank P. Davidson, convener
of the Channel Tunnel Study Group (1957). It was this group's design,
accomplished by agreement with Bechtel Corporation, Brown & Root, Inc. and
Morrison-Knudsen Company, Inc. in 1959, that formed the basis of the subsea
railway link now in service between England and France.

Simple Systems and Other Myths (2001)
by Norman R. Augustine
Former President, CEO, and Chairman and Current Chairman, Executive
Committee, Lockheed Martin Corporatio

The problem is that our
students choose very bland, low nourishment diets in our modern day smorgasbord
curricula. Their concern is with their grade averages rather than their
education. And why not? Grades for students and turf for faculty have become the
keys to the kingdom!Bob Jensen

Drawing on survey responses, transcript data, and
results from the Collegiate Learning Assessment (a standardized test taken
by students in their first semester and at the end of their second year),
Richard Arum and Josipa Roksa concluded that a significant percentage of
undergraduates are failing to develop the broad-based skills and knowledge
they should be expected to master. Here is an excerpt from Academically
Adrift: Limited Learning on College Campuses (University of Chicago Press),
their new book based on those findings.

Continued in article

"New Book Lays Failure to Learn on Colleges' Doorsteps," by David
Glenn, Chronicle of Higher Education, January 18, 2011 ---
http://chronicle.com/article/New-Book-Lays-Failure-to-Learn/125983/
On January 19, ABC News used this report to really lambast the ineffectiveness
of higher education institutions. Like all empirical research into tough issues,
critics will certainly find flaws in this study. But the conclusion cannot be
ignored. With grade inflation combined with or caused by teaching evaluation
impacts on tenure and performance evaluations, we can hardly attribute the
explosion in A and B grades to better learning.

Xtranormal is a website which hosts text-to-speech
based computer animated videoclips which can be created by any user and
uploaded by a downloadable program or created directly online. It has had
little online advertising and has spread by word of mouth and by being
uploaded to Facebook and other social media sites.One website refers to
controversy about an employee from Best Buy being fired for uploading an
animated video complaining about customer service.

The website offers either a free trial program to
be downloaded to the computer with a fairly userfriendly interface, though
limited to simple animation or creating a video while logged into the
website. Popular user-created animations are available to watch.

Jensen Comment
The Devil is in the details. Especially note the tables in this article.

The article does not really deliver on one of the things I worry a lot about
--- the growth in cheap shot graduate degrees awarded by for-profit
universities, especially at the doctoral level. These universities are very
secretive about their admission standards such as GRE and GMAT expectations.
Credit for life experience is an instant turn off for me, because all God's
children had life experiences.

These universities are generally quite secretive about their faculty who
deliver those degrees. It's difficult to evaluate the research credentials of
those faculty. Secondly, most of these doctoral degrees can be earned with fewer
years of full-time study and interactions with teaching and research faculty.
For example, the average onsite accounting doctoral program takes over five
years, most of which is spent on campus interacting with faculty and other
doctoral students. Capella offers an accounting doctoral program that can be
completed in less than three years and has a curriculum more like a masters
program. There is a doctoral thesis at Capella but who signs off on each
accounting doctoral thesis? Do graduates of this program publish later on in our
accounting research journals? Are these graduates making names for themselves in
tenure track positions at major universities?

I'm a long time advocate of distance education, but I'm suspicious of
for-profit university academic standards. If a major research university having
AACSB accreditation commences a distance education that the research faculty at
that institution deems equivalent to the onsite degree program, them I'm all for
expanding degree opportunities for business higher education. But I'm a snob
when others adopt such programs, especially at the masters and doctoral levels.

Tax havens are the ultimate source of strength
for our global elites. Just as European nobles once consolidated their
unaccountable powers in fortified castles, to better subjugate and extract
tribute from the surrounding peasantry, so financial capital has coalesced
in their modern equivalent today: the tax havens. In these fortified nodes
of secret, unaccountable political and economic power, financial and
criminal interests have come together to capture local political systems and
turn the havens into their own private law-making factories, protected
against outside interference by the world’s most powerful countries – most
especially Britain. Treasure Islands will, for the first time, show the
blood and guts of just how they do it.

The nations of the world are harmed by the evasion
of their laws and taxes made possible by tax havens. The tax money is
important but more important is the ability to threaten governments to force
actions that multinational corporations such as investment banks wish done.

These escape routes transform the merely
powerful into the untouchable. “Don’t tax or regulate us or we will flee
offshore!” the financiers cry, and elected politicians around the world
crawl on their bellies and capitulate. And so tax havens lead a global race
to the bottom to offer deeper secrecy, ever laxer financial regulations, and
ever more sophisticated tax loopholes. They have become the silent battering
rams of financial deregulation, forcing countries to remove financial
regulations, to cut taxes and restraints on the wealthy, and to shift all
the risks, costs and taxes onto the backs of the rest of us. In the process
democracy unravels and the offshore system pushes ever further onshore. The
world’s two most important tax havens today are United States and Britain.

But the world is not without means to
remedy the situation. In the late 1700′s piracy flourished because nations
found it advantageous to use them against their enemies. Pirates often
employed as privateers fattened the treasury of the nations hiring them and
did harm to their enemies.

But over time, it became obvious that the
benefits of piracy were outweighed by the faults.

So, nations by treaty and policy ran the
pirates out of business.

The United States in concert with the
European Union, China and other nations could by agreement make this kind of
tax haven impossible to maintain or at the very least difficult.

It has been a daunting task to motivate the
government of the United States to act against the interests of these larger
corporations particularly the financial ones, but the future of this nation
may well depend on those tax dollars and enforcing the national interest.

Bird's involvement would evolve from irritation
that a company could get away with making a claim that so obviously
defies basic business logic to the conviction that many pieces of the
Chinese miracle that trade in the U.S. are, in his words, "flat-ass"
frauds. And what started as a retiree looking into a company has turned
into a dispute that has drawn in other shorts, the Securities and
Exchange Commission, auditors, and, according to recent reports, the
U.S. House Committee on Financial Services. It has also revealed
significant flaws in U.S. markets and how they are regulated. Although
the stocks trade on U.S. exchanges, and thus project a sense of having
to play by American rules, the assets and the principals of many of the
companies reside in China. The companies operate on their terms, leaving
injured parties and the SEC powerless. Bird says the carnage is just
beginning. "The whole thing has no place to go but to blow up," he says.
"That's a rational position for an investor to start with, that every
one of these Chinese reverse mergers is a fraud."

Jensen Comment
Which once again demonstrates that fraud in financial reporting greatly harms or
may totally destroy capitalism. Early on frauds can badly damage the capital
raising ability of legitimate Chinese ventures.

This makes me wonder what proportion of these frauds were audited by
affiliates of the Big Four in China. It might make a good student project to see
what can be gleaned, if anything, from the audit reports.

January 15, 2011 reply from Ramesh Fernando

In reality, the Shanghai and Shenzhen market are
nothing but ponzi schemes. The majority of stocks (red chips) are favoured
by the Chinese Communist Party (CCP) and have some money pumped into them,
when there whole revenue model(with no worry about P&L statements) is based
on false estimates. The SEC's equal in China is totally corrupt and led by
CCP people. As long as the CCP continues in power in China, I would
recommend that no investor put their money there. Much better more liquid
and better regulated markets exist in India and other parts of Asia. It's
true the SEC is letting this fraud continue but you need many more
inspectors at the SEC to watch over all the markets. The Canadian market,
especially the natural resources stock like gold excluding Barrick Gold,
GoldCorp or Kinross (they are much more legitimate being large companies )
are full of ponzi schemes. I wish the SEC would put pressure on the Ontario
Security Commission as well as other provincial securities commissions to
regulate all this false reporting.

Abstract:
Over three decades after its inception, microfinance continues to hold great
promise as a tool for poverty alleviation. Current estimates suggest that
there is approximately $300 billion of unmet demand for microfinance. But
the high operating costs of microfinance institutions (MFIs) that are passed
on to borrowers in the form of high interest rates are a significant
roadblock to MFI expansion. This paper proposes that MFI interest rates can
be lowered systematically if the high cost of obtaining capital is lowered.
High cost of capital increases operating costs which in turn causes MFIs to
charge high interest rates on loans to borrowers to pay for the high cost to
MFIs of providing the loans. If nonprofit MFIs are permitted to operate as
tax-exempt for-profit entities MFIs will be better equipped to attract
investor capital thereby lowering their cost of obtaining capital and
corresponding operating costs and interest rates. An effective vehicle for
achieving this outcome via tax law and corporate regulation would be a
hybrid corporate form for social enterprise: an efficient for-profit firm
with all the advantages of a nonprofit and none of the drawbacks.

Jensen Comment
Perhaps instead of tax exemptions, tax credits could be allowed for a period of
time on the basis of number of jobs created or payrolls.

Aided by at least $43 million in assistance from
the government of Massachusetts and an innovative solar energy technology,
Evergreen Solar emerged in the last three years as the third-largest maker
of solar panels in the United States. Green

But now the company is closing its main American
factory, laying off the 800 workers by the end of March and shifting
production to a joint venture with a Chinese company in central China.
Evergreen cited the much higher government support available in China.

The factory closing in Devens, Mass., which
Evergreen announced earlier this week, has set off political recriminations
and finger-pointing in Massachusetts. And it comes just as President Hu
Jintao of China is scheduled for a state visit next week to Washington,
where the agenda is likely to include tensions between the United States and
China over trade and energy policy.

The Obama administration has been investigating
whether China has violated the free trade rules of the World Trade
Organization with its extensive subsidies to the manufacturers of solar
panels and other clean energy products.

While a few types of government subsidies are
permitted under international trade agreements, they are not supposed to
give special advantages to exports — something that China’s critics accuse
it of doing. The Chinese government has strongly denied that any of its
clean energy policies have violated W.T.O. rules.

Although solar energy still accounts for only a
tiny fraction of American power production, declining prices and concerns
about global warming give solar power a prominent place in United States
plans for a clean energy future — even if critics say the federal government
is still not doing enough to foster its adoption.

Beyond the issues of trade and jobs, solar power
experts see broader implications. They say that after many years of relying
on unstable governments in the Middle East for oil, the United States now
looks likely to rely on China to tap energy from the sun.

Evergreen, in announcing its move to China, was
unusually candid about its motives. Michael El-Hillow, the chief executive,
said in a statement that his company had decided to close the Massachusetts
factory in response to plunging prices for solar panels. World prices have
fallen as much as two-thirds in the last three years — including a drop of
10 percent during last year’s fourth quarter alone.

Not long ago, Massachusetts Governor Deval Patrick
was calling Evergreen Solar a "symbol" of his state's economic future.
Symbolism would appear to be overrated.

Evergreen announced last week that it is shutting
its Massachusetts plant and will lay off 800 workers. That's the same plant
Mr. Patrick had state taxpayers fund in 2007 to the tune of $58 million in
grants, loans and land and tax incentives—one of the largest investments in
a private company in Bay State history. Remind us not to let the Governor
pick our stock portfolio.

The solar company started in 1994 and advertises a
"string ribbon" technology that reduces the amount of silicon used in solar
panels. Evergreen rode the green energy political bubble through a 2000 IPO,
and through news in 2007 that it would build, with state aid, a flagship
plant in Devens, Massachusetts.

A look at the company's finances shows it has lost
a cumulative $685 million. The majority of this red ink was on the books
prior to Mr. Patrick promising state aid. The company has produced little
good news since, including warnings from Nasdaq that it could be delisted,
an unproductive debt restructuring, and a string of money-losing quarters.
None of this fazed Mr. Patrick, who touted Evergreen as a cornerstone of his
strategy to turn Massachusetts into a hub of green energy innovation.

Evergreen blames its plant closing on competition
from subsidized Chinese manufacturers. "Solar manufacturers in China have
received considerable government and financial support, and together with
their low manufacturing costs, have become price leaders within the
industry," says Evergreen President Michael El-Hillow.

But Evergreen has also been subsidized in the
multiple ways that federal and state governments favor solar power. Maybe
the problem is Evergreen's business model, or perhaps its decision to locate
a plant in a high-cost, union-labor state. Evergreen has long been aware of
China's solar manufacturing advantage, waiting until it received the $58
million from Massachusetts to announce it would outsource jobs to a plant it
continues to operate in China.

Bay State taxpayers are now stuck with the losses.
Mr. Patrick says he intends to claw back some of that $58 million, but
Evergreen says it doesn't owe more than $4 million. Taxpayers will also be
thrilled to know the state is so worried about getting a new tenant for the
manufacturing site that it may let Evergreen keep its sweetheart $1-a-year
lease—allowing the company to sublet it at a profit.

All of this adds up to one more case study in the
perils of politically allocated capital. Like President Obama, Mr. Patrick
has advertised the illusion that governments can nurture new companies, even
whole new industries, with targeted taxpayer "investments." This is the
entire premise of the "clean energy" industry, most of which wouldn't exist
without subsidies because it can't compete on a market basis.

Politicians always seem to show up for the green
energy ribbon-cuttings but somehow they manage to miss the plant closings.
Evergreen Solar is indeed a "symbol"—of the folly of taxpayer green
subsidies.

Abstract:
Over three decades after its inception, microfinance continues to hold great
promise as a tool for poverty alleviation. Current estimates suggest that
there is approximately $300 billion of unmet demand for microfinance. But
the high operating costs of microfinance institutions (MFIs) that are passed
on to borrowers in the form of high interest rates are a significant
roadblock to MFI expansion. This paper proposes that MFI interest rates can
be lowered systematically if the high cost of obtaining capital is lowered.
High cost of capital increases operating costs which in turn causes MFIs to
charge high interest rates on loans to borrowers to pay for the high cost to
MFIs of providing the loans. If nonprofit MFIs are permitted to operate as
tax-exempt for-profit entities MFIs will be better equipped to attract
investor capital thereby lowering their cost of obtaining capital and
corresponding operating costs and interest rates. An effective vehicle for
achieving this outcome via tax law and corporate regulation would be a
hybrid corporate form for social enterprise: an efficient for-profit firm
with all the advantages of a nonprofit and none of the drawbacks.

Jensen Comment
Perhaps instead of tax exemptions, tax credits could be allowed for a period of
time on the basis of number of jobs created or payrolls.

You
can view an outdated tutorial video for a very old version of Camtasia that I
captured for my students to years ago to help them when learning Camtasia. ---
http://www.cs.trinity.edu/~rjensen/video/Tutorials/CamtasiaTutorial.wmv
Although the newer versions of Camtasia changed screen capturing somewhat, the
screen capturing process is almost the same process today as I illustrated in
the above video.

In my viewpoint Camtasia is still the gold standard for video screen capturing
although the price is now over $300 for the latest version. As Richard
suggested, you might begin with the Jing free version, but for compression you
will have to move up to Jing Pro or Camtasia.

Normally you capture avi files that are easy to edit but are enormous in size.
Compression ("producing") saves you over 90% of video file size without serious
loss of quality. However, save your initial avi files in case you want to edit
the videos later on and re-compress them.

When I made the above tutorial video I was mostly creating rm Real Media
compressions. Later I shifted to wmv compressions since my students mostly used
Windows Media Player for playback.

I just finished the first week of a 12-week MSA
online tax course at UConn. I put students in groups and I ask them to work
fairly lengthy quizzes (homework) independently, putting their answers in an
Excel spreadsheet, and then they meet in chats to discuss their differences.
When they can’t resolve a question, they invite me into chat. This week a
student introduced me to Google docs, and I was swept off my feet by the way
this tool could be used in my class. I love it! I created a video on the fly on
Thursday to illustrate how to create a spreadsheet and share it with other group
members. I may be the last to the party on this tool, but in case some of you
aren’t aware of it, I am posting the video.

If anyone wants the “quiz” that the students
worked, send me an email (not AECM), and I will send you the file.

Amy

Amy Dunbar
University of Connecticut School of Business
Department of Accounting
2100 Hillside Road Unit 1041 Storrs, CT 06269-1041
amy.dunbar@business.uconn.ed

Audio Capturing Without a Microphone When Recording Parts of Camtasia
videos
Note that in the video below, the explanation begins 1:10 (70 seconds) into the
video at the top of this Camtasia helper page ---
http://www.techsmith.com/learn/camtas...
.
The above video explains how to record some audio in Camtasia without having to
run that audio through a microphone such as when you want to embed part of a
YouTube video in your Camtasia video.

Note that this may not work in Windows XP systems. In days of old some of my my
embedded clips of video had poor sound quality due to having to hold my
microphone near the speakers. Of course it was possible to edit in avi clips
recorded on other capture software, but this was a pain.

Over the years this has been my major complaint with Camtasia video recording.
Windows 7 users can now more easily work around the problem.

Also note this has never been a problem in Camtasia video recording on a Mac.

Mike Curtis, an employee of TechSmith, replied to
Audio Without a Microphone in Camtasia Studio?, a question about TechSmith.
Good news! As someone who had to explain how to "trick" Windows or provide
various levels of work-arounds if one wanted to record their system audio
(sound from the speakers) I was so excited when CS version 7.0 made it easy.
Check out the 1:10 section of this video:
http://www.techsmith.com/learn/camtas..

If you have Windows XP though, you may still have
issues and have to do it "the old way" depending on your sound card.

Camtasia for Mac also makes it easy to capture system audio.

Rethinking Capitalism

If Harvard University Business School faculty took a vote regarding who was
their most valuable faculty member my guess without doubt would be that the
winner would be economist Michael Porter. Apart from being a fine colleague and
great teacher, he's probably Harvard's most popular consultant and author of
books and many articles in the Harvard Business Review ---
http://en.wikipedia.org/wiki/Michael_Porter

I could not help trying to think how Porter's interview might've compared
with the same interview being conducted on the late Milton Friedman. In my
estimation, Michael Porter cannot hold a candle in comparison with Milton
Friedman whose "Free to Choose" PBS series in the 1970s is a classic that lives
today as even more relevant since many of his dire predictions and warnings
about entitlements are now coming true ---
http://en.wikipedia.org/wiki/Milton_Friedman

Let me give you a concrete example. My new Dell 64-bit Studio Laptop computer
had a nagging hardware problem in that it would always start to warm up and then
die out about 90% of the time. It would sometimes take me 30 minutes to finally
get the startup to hold fast. My product consultant at Dell forwarded me to
Dell's Tech Support Team in India. A technician with very precise English guided
me through a series of tests that took over 30 minutes. He then took over my
computer such that, while sitting in the White Mountains of New Hampshire, I
could watch him move my mouse and download something.

In the end he set me up with a superb repair technician who, ten days later,
arrived from Boston with a box of parts. The repair technician was very good,
but it took him about two hours in my basement plus the drive time (over three
hours each way) from Boston. He earns about $100 per hour so it does not take a
rocket scientist to conclude that, with the cost of parts and labor, Dell really
lost money on the revenue from my laptop (including the $350 price of a
three-year onsite warranty for parts and labor).

My Interview Question for Professors Friedman and Porter
"Assuming that tech support teams of identical quality and customer satisfaction
(I was certainly satisfied with my Dell tech team) can be established in India
or Texas, should Dell be socially responsible by creating jobs in Texas and
avoid India even if the Texas tech team costs ten times as much for each minute
of service rendered?"

Anticipated Answer from Professor Friedman"By all means outsource to India under those
circumstances. The responsibility of a corporation is to maximize returns to
owners while operating within the law. The only condition for using the more
expensive alternative would be if the law required domestic labor. But that
would be counterproductive because requiring domestic labor in the technology
sector under the doctrine of protectionism would lead to protectionism
retaliations in foreign markets such that as many or more jobs would be lost in
the U.S. agricultural and export services sectors if the economy."

Anticipated Answer from Professor PorterI think Dell should develop green-colored computers that
run on solar power and radiation from fluorescent lights. This is a new market
that could create new jobs in the United States and have multiplier effects on
manufacturers of the component parts as well as bringing more profits from
shareholder.

Then in whisper after the interview is over: "Off the
record, Dell should always seek the lowest price alternatives subject to quality
control standards and standards of customer satisfaction."

Even Karl Marx attributed much of the cause of unemployment to
overpopulation. Arthur Lewis provides a rather clear theory that the wage rates
in industrialized nations will always remain low because of the "unlimited
supply" of global subsistence-level labor. Laziness has little to to with the
major problem of unemployment. It has more to do with the oversupply of labor
coupled in modern times with vastly improved communication and transportation
systems.

World Population Growth Year Population
1 200 million
1000 275 million
1500 450 million
1650 500 million
1750 700 million
1804 1 billion
1850 1.2 billion

In 1954, when Lewis wrote his most famous theory, there were nearly 2.8
billion people back in the wonderful 1950s (when I was literally enjoying every
moment of high school). Now we're living in a world of over 7 billion where jobs
are easily transported to India, Indonesia, Africa, Mexico and all other points
south of the Rio Grande.

We will soon have technology capable of assembling automobiles with one
worker who turns the factory switch on or off. It's analogous to the evolution
of replacing 5,000 1940 telephone switchboard operators in Cleveland with
automated switchboards. All this is taking place while the world population more
than doubled between 1950 and 1990. There's one highly automated factory in
China that now produces over a third of the foot socks sold in the world.

When I was a kid, a farm family in Iowa could make a good living on 80 acres
of land. That same family probably cannot make good living on less than 240
acres of land in Iowa and even 240 acres is too small for the farming capacities
of modern farming machinery designed to work 2,000 or more acres of land with
one or two farmers.

Now we are witnessing the decline of the newspaper and magazine industry due
to an explosion of faster and more innovative ways of communicating local and
global news.

The problem becomes ever more acute as we keep producing more people faster
than jobs for those people. There are a few positive signs such as the fact that
the rate of growth in population is slowing even if the growth itself is still
upward.

Poverty is caused by teens and adults who are too ambitious in producing
children relative to the finite resources of this planet. Of course there are
many ways we can support population growth by better utilizing and preserving
the most crucial resources like fish in the sea.

I think Arthur Lewis was correct about the true causes of unemployment and
poverty --- the problem is too many of us creating an unlimited supply of labor.

Nonlinear systems, however, are not so well
behaved. They can appear stationary for a long while, then without anything
changing, they exhibit jumps in variability—so-called “heteroscedasticity.”
For example, if one looks at the range of economic variables over the past
decade (daily market movements, GDP changes, etc.), one might guess that
variability and the universe of possibilities are very modest. This was the
modus operandi of normal risk management. As a consequence, the likelihood
of some of the large moves we saw in 2008, which happened over so many
consecutive days, should have been less than once in the age of the
universe.

Our problem is that the scientific desire to
simplify has taken over, something that Einstein warned against when he
paraphrased Occam: “Everything should be made as simple as possible, but not
simpler.” Thinking of natural and economic systems as essentially stable and
decomposable into parts is a good initial hypothesis, current observations
and measurements do not support that hypothesis—hence our continual
surprise. Just as we like the idea of constancy, we are stubborn to change.
The 19th century American humorist Josh Billings, perhaps, put it best: “It
ain’t what we don’t know that gives us trouble, it’s what we know that just
ain’t so.”

Screen Capture Tools for Students to Create Tutorials, Discussions, and
Presentations

January 7, 2011 message from Rick Newmark

I have been using Camtasia Studio
to record my class sessions and to create tutorials for about two years now.
Thanks to all of you on this list who have provided great information about
various products, especially the practical tips and real-world problems and
solutions.

I decided that creating video
tutorials and presentations is a practical skill that my students should
learn to help them effectively communicate electronically. I also think this
skill will give them a competitive advantage in the work place and help them
build their personal brand on the social web.

The problem with putting Camtasia
and/or Adobe Captivate (I have not used it, but some of my friends across
campus use it because it has more interactive tools) in the computer labs is
the cost and that students would have to pay to put it on their own
computers. Also, I want something really simple to use.

Initially, I found an open-source
and free application called CamStudio. However, it only works on PCs and
there is a learning curve similar to Camtasia Recorder. Although I have not
yet used it, it seems like a good product and there are some Youtube
tutorials to help you get started. This seems like the most robust free
alternative to Camtasia.

Then, some additional searching
pointed me to several browser-based (no downloads and platform independent)
solutions. I found the following solutions:http://screenr.com/,
http://www.screenjelly.com/, and
http://www.screencast-o-matic.com/. Screenr
and Screenjelly are designed to make screencasts for Twitter. Neither one
gives you much control. Screenr has a five-minute recording limit, allows
you to set the capture area, and allows you to pause and resume. Screenjelly
has a three-minute limit and only records the full screen. Screenr requires
a Twitter account, but Screenjelly allows you to email the link rather than
tweeting it. Both only you to capture audio from your microphone, so if you
you need to turn up the volume on your speakers if you also want audio from
the computer captured. The clear upsides to these solutions is that they are
fast and easy and interface with Twitter. The downside is that they have a
short time limit and they do not provide tools for tutorials like
highlighting the cursor.

Fortunately, I found
Screencast-O-Matic
http://www.screencast-o-matic.com/. It has
the following features: no time limit for recordings, pause and resume, set
capture area, automatically highlight cursor, visually show left- and
right-clicks, visually shows left-button- and right-button-dragging, add
comments on the bottom of the screen at different pre-determined times, and
allows you to download your screencasts in Mp4, AVI, or FLV formats, allows
you to capture video from a webcam, and they will host for free all of your
screencasts <= 15-minutes per screencast. I made a sample video and the
results are very good. A 2-minute 1366 x 768 video took 10MB (Mp4 format).
For $9/year, you can host videos up to 60-minutes long, lose the small
watermark at the bottom left of the screen (unobtrusive), and get Camtasia-style
editing tools like: zoom, cut out a piece of a clip, split and insert a
clip, change speeds, and add transitions. The web site has good tutorials
for basic operation and using the advanced tools. I have not yet paid for
the pro membership, though I plan on doing so. I’m very excited about
getting students and my colleagues to use this tool.

What I really like is that
students can take their screencast and bring it into iMovie or Windows
Moviemaker and add screenshots by using the Windows snipping tool or
7capturehttp://www.7capture.com/.
7capture good for capturing whole windows because it
captures the rounded corners on a window, but you need to make sure that the
window you want to capture is on top (only captures whole windows, a whole
monitor, or your entire desktop). Here is a link to take screen shots on a
mac
http://graphicssoft.about.com/od/screencapturemac/ht/macscreenshot.htm.

If your students do not have
their own computer and your lab machines do not have Moviemaker, I found a
browser-based alternative, JayCuthttp://jaycut.com/,
though I am not impressed by the video image quality.
I’m now trying Creaza. It is a suite of online tools, including audio
editing, video editing, concept mapping, and making cartoons. I’ll update
the list as I try the tools.

Thank you for the very informative message. In your updates you might
tell us more about video compression, codecs, and playback comparisons of
these various alternatives. There are also such added features such as
interactive playback and quiz/examination features in such compressions as
the swf compression of Shockwave format ---
http://en.wikipedia.org/wiki/SWF .

With so many hours of video, I'm curious about how you archive these
files and how you serve them up for students.

One really helpful feature that I find in Camtasia is the "pause" feature
that allows you to pause the recording of a video and then take it up at the
exact same point after the pause. One use of this feature is to prepare for
the next phase of the video and collect your notes and thoughts for that
phase.

Some other questions you might answer:

Can you record audio internally without having to pass audio through
a microphone such as when embedding video clips within a video?

Does the recorder have enhancement features similar to those in
Camtasia such as mouse highlighting.

Can you customize the screen capturing with smaller windows and
floating windows that follow the mouse?

Can you vary audio and video capture rates so that, when necessary,
you can greatly cut back on storage requirements except in cases where
higher capture rates improve lip synchronization. High capture rates are
less important when you are capturing computer screens such as Excel
screens.

Bob Jensen

You can view an outdated tutorial video for a very
old version of Camtasia that I captured for my students to years ago to help
them when learning Camtasia. ---
http://www.cs.trinity.edu/~rjensen/video/Tutorials/CamtasiaTutorial.wmv
Although the newer versions of Camtasia changed screen capturing somewhat, the
screen capturing process is almost the same process today as I illustrated in
the above video.

In my viewpoint Camtasia is still the gold standard for video screen capturing
although the price is now over $300 for the latest version. As Richard
suggested, you might begin with the Jing free version, but for compression you
will have to move up to Jing Pro or Camtasia.

Normally you capture avi files that are easy to edit but are enormous in size.
Compression ("producing") saves you over 90% of video file size without serious
loss of quality. However, save your initial avi files in case you want to edit
the videos later on and re-compress them.

When I made the above tutorial video I was mostly creating rm Real Media
compressions. Later I shifted to wmv compressions since my students mostly used
Windows Media Player for playback.

I just finished the first week of a 12-week MSA
online tax course at UConn. I put students in groups and I ask them to work
fairly lengthy quizzes (homework) independently, putting their answers in an
Excel spreadsheet, and then they meet in chats to discuss their differences.
When they can’t resolve a question, they invite me into chat. This week a
student introduced me to Google docs, and I was swept off my feet by the way
this tool could be used in my class. I love it! I created a video on the fly on
Thursday to illustrate how to create a spreadsheet and share it with other group
members. I may be the last to the party on this tool, but in case some of you
aren’t aware of it, I am posting the video.

Jensen Comment
Note the column for "Accounting" and remember that Business Week is only
ranking MBA programs here. MBA programs are not nearly as important to
accounting recruiters as undergraduate and masters of accountancy programs.

Recruiters for accounting firms generally do not seek new auditors from the
most prestigious MBA One reason is accounting firms don't like to pay top
MBA rates for new auditors. A second reason is that in many states MBA graduates
do not have enough accounting to take the CPA examination unless they were
previous accounting majors or took undergraduate courses in accounting in
addition to their MBA courses in accounting.

MBA graduates from prestigious MBA programs have a better chance of being
hired by consulting and assurance services divisions of CPA firms. Much depends
upon undergraduate specialties as well such as former computer science majors.

For really top MBA graduates CPA firms often face stiff and high-paying
competition such as competition from major consulting firms and Wall Street
banks and brokerages.

In this job market MBAs are also increasingly considering working for Uncle
Sam where opportunities include joining the FBI, the SEC, the IRS, etc.
Accounting graduates sometimes underestimate the opportunities afforded by
working for some government agencies. For example, FBI experience can be a great
springboard for a career in forensic accounting. Before earning her PhD in tax
accounting, Amy Dunbar obtained valuable experience as an FBI agent.

"Top 10 SEO Tips for New Websites: Neophyte sites should be
realistic in their goals, focus on building trust and crank up the social media
campaign," DevX.com, January 4, 2011 ---
http://www.devx.com/DevX/Article/46214/0/page/1
Thanks ot Jerry Trites for the heads up.

Every site needs to attract attention. Since people
can only come to your site by typing your URL directly into the browser,
come to your site from a link on another site another, or find you via a
search engine, the topic of getting traffic from search engines is a very
important one. In this article, we'll go over SEO (Search Engine
Optimization) strategies that many new sites would
do well to follow to grow traffic to their sites.

Japanese politics is once again in turmoil, with
the government's approval ratings around 20%. Prime Minister Naoto Kan is
trying to force out his rival within the Democratic Party of Japan, Ichiro
Ozawa, which might boost his own popularity but would probably cause enough
defections to destroy a precarious majority. And he has chosen as his New
Year initiative an increase in the consumption tax—a hugely unpopular policy
that cost him the upper house election last year and would surely harm the
economy.

Looks like it's almost time for another change of
leader in Tokyo, which is becoming the Italy of Asia. Whoever it is, he will
have to tackle Japan's problems before unpleasant outcomes are forced upon
it. Without cuts to entitlements and tax cuts to promote growth, Tokyo will
continue turning into Athens.

Mr. Kan's claims to fiscal rectitude are belied by
the draft fiscal 2011 budget released late last month. It calls for another
year of near-record addition to a national debt already approaching 200% of
GDP. The budget includes $867 billion of spending, though total government
revenue amounts to just $501 billion. The budget proposes trimming
discretionary spending only marginally, cuts that are overwhelmed by the
uncontrolled growth of entitlement programs, which make up 53% of total
spending.

Japan is foundering
on the promises made by past generations of politicians that are coming due
in a rapidly aging society. These include
unfunded pensions and medical care for the elderly. And it will only get
worse—2012 is expected to be a watershed year when the biggest wave of baby
boomers begins to retire.

As two lost decades since the bursting of the
bubble show, Japan's consensus-based political system seizes up when it
comes to allocating societal losses. In the 1990s, that meant that the
government encouraged banks to sit on bad loans rather than undergo the kind
of cathartic restructuring the U.S. is now undergoing, at least in some
parts of the economy. That made Japan appear more stable, but without
creative destruction the economy was unable to return to growth. This time
the leverage is spread across generations, with the lack of growth making
the promises to the old a bigger burden, which in turn makes it impossible
to pursue pro-growth policies.

Payments on the national debt next year are
projected at an already substantial $263 billion, but this assumes a payout
of no more than 2% on 10-year bonds. Yields may remain well below this level
for now, but in recent auctions signs have emerged that investors are losing
their appetite for government bonds. The national debt is forecast to exceed
household savings in the next year, as retirees continue to spend down
savings. As long as growth remains slow, corporations will probably continue
to save. But if Tokyo is forced to look abroad for funding, it will have to
pay much higher rates.

That has the potential to blow out the budget in
spectacular fashion. With central and local government debt now estimated at
over $11 trillion, each one percentage point increase in yields will cost
$110 billion. Adding in its unfunded liabilities, Japan has already reached
the point at which its debt load will continue to increase regardless of how
much it cuts spending or raises taxes.

In other words, Japan is about to run into the late
economist Herb Stein's obvious but oft-overlooked law, which states that if
something cannot continue it won't. The crunch is coming in one form or
another.

. . . High suicide rates, a subdued role for
women and, indeed, the answers that Japanese themselves provide to
questionnaires about their happiness, do not speak of a nation entirely at
ease with itself in the 21st century. It is also possible that Japan is
living on borrowed time. Public debt is among the highest in the world –
though, significantly, almost none of it is owed to foreigners – and a
younger, poorer-paid generation will struggle to build up the fat savings on
which the country is now comfortably slumbering.

If the business of a state is to project economic
vigour, then Japan is failing badly. But if it is to keep its citizens
employed, safe, economically comfortable and living longer lives, it is not
making such a terrible hash of things.

I find the Japanese culture in general very confusing. Education K-12 is very
intense and very competitive. Then, when many of the chosen best students get
into college, it often turns into undergraduate years of heavy partying. It is
much more difficult to get into a Japanese college than to graduate from it ---
http://snipurl.com/japanesestudentpartying

Texas A&M Case on Computing the Cost of Professors and Academic Programs
Somebody at Texas A&M has rushed in where angels fear to tread
On November 5, 2010 I shared the "Texas A&M Case on Computing the Cost of
Professors and Academic Programs" with the AECM and the AAA Commons as well as
posting it to my Website at
http://www.trinity.edu/rjensen/Theory02.htm#ManagementAccounting

There's a memorable scene in the movie
"Ghostbusters" when Dan Akroyd says in horror to Bill Murray after they lose
their jobs at a university: "I've worked in the private sector. They expect
results."

The same can't always be said of universities,
where costs are rising faster even than health care. Now, a growing number
of states are demanding that their taxpayer-funded universities show
evidence of improvement in student performance. Perhaps the most aggressive
school is Texas A&M, which is trying to measure professor productivity and
performance. Given the reaction from some in the faculty lounges, you'd
think Texas had banned football.

Since 1978 college costs have risen by more than
tenfold, about three times the rate of inflation, according to an American
Enterprise Institute study. Four years of college now cost as much as
$200,000 at some private institutions, making this perhaps the only industry
in America that has recorded negative productivity gains. In 2009 tuitions
rose by 6%, four times overall prices. With rising tuition comes rising
indebtedness, and for the first time student loan debt of $850 billion now
exceeds credit card debt of $830 billion. State subsidies keep rising but
are swallowed up in higher university costs and thus haven't lowered
tuitions.

Professors' salaries and benefits make up about 60%
to 70% of university noncapital costs. So Texas A&M is starting to ask such
basic questions as: Is that psychology or engineering professor worth his
$125,000 salary?

The school is trying to answer this question by
applying a cost-benefit analysis of how much each professor earns in salary
per student taught. The school also uses such metrics of value added as
research dollars brought in by a professor and student evaluations of how
well a teacher performs in a classroom. For high-achieving professors, the
new pay-for-performance standards offer bonuses of up to $10,000 a year.

The academic reaction to the plan has been furious.
Nationally, the American Association of University Professors (AAUP) calls
the system of "balancing revenues and costs" both "simplistic and very
dangerous." Peter Hugill, a professor of geology and the head of the AAUP
chapter at Texas A&M, has denounced the new analysis as "a weapon" to hang
over the head of professors that is making "Texas a laughing stock." The
faculty is pressuring the university to lower the bonuses to $1,500 and
spread the money to more teachers.

Frank Ashley, the vice president for academic
affairs at A&M, replies that the reforms are about accountability: "We're
being held accountable for the money the state gives us, and we want to show
that we're not throwing the money away."

What a concept. Given that Texas faces a $12
billion deficit and every year writes a nine-figure check to Texas A&M (and
to the University of Texas), taxpayers deserve more transparency and cost
containment. A pay system that requires middle and lower income families to
take on enormous debt to subsidize universities is unfair.

No doubt the Texas A&M system is a work in progress
and will be tweaked as it gains experience in evaluating its professors'
classroom performance and contributions to the university. Perhaps the
professors would reply that too many students think they're on a subsidized,
four-year party. But we hope the school's regents persist with this effort
and that the reformers succeed in their efforts to spread
pay-for-performance accountability to other public universities.

Two of the largest bookstore chains—Barnes & Noble
and Borders—are in danger of being forced into bankruptcy; their plight
raises the broader question of whether bookstores will survive in any
significant number, and, if not, what the consequences will be.

There are two clear threats, both Internet-related,
to the bookstore. The newest is the e-book, in which the contents of a book
are transmitted over the Internet to an electronic reader owned by the
book’s buyer. No bookstore is involved. Slightly older is the sale, as
opposed to the delivery, of a book online; Amazon is the principal seller in
this market. No bookstore is involved unless Amazon doesn’t have the book in
inventory; in that event the customer is referred by Amazon to a bookstore
that has the book and will sell it online and deliver it to the buyer; the
purchase is made through Amazon. Most of the books that Amazon and the other
online booksellers don’t carry in stock are out of print, and bookstores
that stock such books tend to be small (though there are some exceptions),
because the market for such books is tiny.

A possible third threat is diminished appetite for
books. I haven’t been able to find good statistics on annual sales of books
in the United States (and anyway “books” is an extremely heterogeneous
product category), but it would seem that the amount of entertainment and
instruction available online is so great that online substitution for
reading books must have reduced the demand for them. At the same time,
however, the demand for books should be stimulated by the fall in cost when
books are bought online, cutting out the middleman—the bookstore—a point to
which I’ll return shortly.

It seems inevitable that the number of books sold
through bookstores will plummet. Books bought through bookstores are more
costly not only in price (to cover the costs of the bookstore), but also in
customers’ time—the time required to travel to and from the bookstore, find
the book one wants to buy, and complete the purchase (which takes more time
than an online purchase). The only offsetting advantages of the bookstore
are the opportunity it provides for browsing and the fact that the customer
can see and handle the book before buying it. But these advantages are
offset to a considerable extent (doubtless more than offset, for many
customers) by the use by online sellers of artificial-intelligence programs
to recommend books to their customers, by the much vaster inventory of an
online seller like Amazon, by ease of search, by the reader reviews that the
seller presents, and by the seller’s ability to allow customers to look
inside the online book before ordering it, much as if he were leafing
through a printed book in a bookstore.

It is true that Amazon’s book-recommendation
program is primitive, and is no substitute for browsing in a well-stocked
bookstore, but it will improve; one can foresee the day when customers will
furnish (and Amazon store) comprehensive information about their age, sex,
education, occupation, and reading tastes, which Amazon will use to create
an initial list of recommended purchases, which it will refine as it
receives orders from the customer plus supplementary information from the
customer as the customer’s tastes and interests change.

At present fewer than 30 percent of all books are
bought online (either in hard copy or as an e-book), but I have seen an
estimate that this figure will grow to 75 percent within a few years. Very
few bookstores will have enough customers to survive if bookstore sales fall
from 70 percent to 25 percent of all book sales, except those bookstores
specializing in out of print books—whose customers will largely be online.
In time, moreover, with more and more publishing electronic, there will be
fewer and fewer “out of print” books.

The substitution of online for bookstore
distribution of books will provide a substantial social saving and, as I
said, increase the demand for books by reducing their retail price. As for
the effect on publishers and authors of books, there is concern that it will
be adverse, but that seems unlikely. A seller tries to minimize his cost of
distribution, just as he tries to minimize his other costs; the publisher is
the ultimate seller, and the bookstore part of the chain of distribution.
But there is an important, and potentially relevant, exception, and that is
where a distributor provides point-of-sale services that increase the demand
for the product. This is the rationale for resale price maintenance:
manufacturers of some goods place a floor under the retail price of the
goods, thus deliberately increasing the retailers’ margin, but hoping by
doing so to induce them to engage in nonprice competition that will increase
the demand for the goods. Bookstore staffs, by decisions they make
concerning choice and display of books to carry, and by making purchasing
suggestions to customers, can, in principle, increase the demand for books.
But these services cannot guarantee the survival of many bookstores, because
unless the services are valued by a greater margin than seems realistic to
expect, there will be too few customers to defray the bookstore’s fixed
costs at acceptable prices.

The question then becomes whether the loss of
point-of-sale services that bookstores provide will hurt publishers (and
therefore authors, whose prosperity is linked to that of publishers) more
than it will help them by reducing their distribution costs. That too is
doubtful. As technology continues its forward march, online booksellers will
find it increasingly feasible to duplicate and indeed improve on the
point-of-sale services that bookstores offer. Bookstores will decline, and
perhaps vanish when the current older generation, consisting of people
habituated to printed books (as to printed newspapers), dies off. Yet this
may well represent genuine economic progress, just as department stores and
supermarkets represent progress though they cause the demise of countless
small retailers.

Texas A&M Case on Computing the Cost of Professors and Academic Programs

Jensen Comment
In an advanced Cost/Managerial Accounting course this assignment could have two
parts. First assign the case below. Then assign student teams to write a case on
how to compute the cost of a given course, graduate in a given program, or a
comparison of a the cost of a distance education section versus an onsite
section of a given course taught by a tenured faculty member teaching three
courses in general as well as conducting research, performing internal service,
and performing external service in his/her discipline.

From The Wall Street Journal Accounting Weekly Review on November 5,
2010

SUMMARY: The article describes a contribution margin review at Texas A&M
University drilled all the way down to the faculty member level. Also
described are review systems in place in California, Indiana, Minnesota,
Michigan, Ohio and other locations.
CLASSROOM APPLICATION: Managerial concepts of efficiency, contribution
margin, cost management, and the managerial dashboard in university settings
are discussed in this article.

QUESTIONS:
1. (Introductory) Summarize the reporting on Texas A&M University's Academic
Financial Data Compilation. Would you describe this as putting a "price" on
professors or would you use some other wording? Explain.

2. (Introductory) What is the difference between operational efficiency and
"academic efficiency"?

3. (Advanced) Review the table entitled "Controversial Numbers: Cash Flow at
Texas A&M." Why do you think that Chemistry, History, and English
Departments are more likely to generate positive cash flows than are
Oceanography, Physics and Astronomy, and Aerospace Engineering?

4. (Introductory) What source of funding for academics is excluded from the
table review in answer to question 3 above? How do you think that funding
source might change the scenario shown in the table?

5. (Advanced) On what managerial accounting technique do you think
Minnesota's state college system has modeled its method of assessing
campuses' performance?

6. (Advanced) Refer to the related article. A large part of cost increases
in university education stem from dormitories, exercise facilities, and
other building amenities on campuses. What is your reaction to this parent's
statement that universities have "acquiesced to the kids' desire to go to
school at luxury resorts"?

Carol Johnson took the podium of a lecture hall one
recent morning to walk 79 students enrolled in an introductory biology
course through diffusion, osmosis and the phospholipid bilayer of cell
membranes.

A senior lecturer, Ms. Johnson has taught this
class for years. Only recently, though, have administrators sought to
quantify whether she is giving the taxpayers of Texas their money's worth.

A 265-page spreadsheet, released last month by the
chancellor of the Texas A&M University system, amounted to a profit-and-loss
statement for each faculty member, weighing annual salary against students
taught, tuition generated, and research grants obtained.

Ms. Johnson came out very much in the black; in the
period analyzed—fiscal year 2009—she netted the public university $279,617.
Some of her colleagues weren't nearly so profitable. Newly hired assistant
professor Charles Criscione, for instance, spent much of the year setting up
a lab to research parasite genetics and ended up $45,305 in the red.

The balance sheet sparked an immediate uproar from
faculty, who called it misleading, simplistic and crass—not to mention,
riddled with errors. But the move here comes amid a national drive, backed
by some on both the left and the right, to assess more rigorously what,
exactly, public universities are doing with their students—and their tax
dollars.

As budget pressures mount, legislators and
governors are increasingly demanding data proving that money given to
colleges is well spent. States spend about 11% of their general-fund budgets
subsidizing higher education. That totaled more than $78 billion in fiscal
year 2008, according to the National Association of State Budget Officers.

The movement is driven as well by dismal
educational statistics. Just over half of all freshmen entering four-year
public colleges will earn a degree from that institution within six years,
according to the U.S. Department of Education.

And among those with diplomas, just 31% could pass
the most recent national prose literacy test, given in 2003; that's down
from 40% a decade earlier, the department says.

"For years and years, universities got away with,
'Trust us—it'll be worth it,'" said F. King Alexander, president of
California State University at Long Beach.

But no more: "Every conversation we have with these
institutions now revolves around productivity," says Jason Bearce, associate
commissioner for higher education in Indiana. He tells administrators it's
not enough to find efficiencies in their operations; they must seek
"academic efficiency" as well, graduating more students more quickly and
with more demonstrable skills. The National Governors Association echoes
that mantra; it just formed a commission focused on improving productivity
in higher education.

This new emphasis has raised hackles in academia.
Some professors express deep concern that the focus on serving student
"customers" and delivering value to taxpayers will turn public colleges into
factories. They worry that it will upend the essential nature of a
university, where the Milton scholar who teaches a senior seminar to five
English majors is valued as much as the engineering professor who lands a
million-dollar research grant.

And they fear too much tinkering will destroy an
educational system that, despite its acknowledged flaws, remains the envy of
much of the world. "It's a reflection of a much more corporate model of
running a university, and it's getting away from the idea of the university
as public good," says John Curtis, research director for the American
Association of University Professors.

Efforts to remake higher education generally fall
into two categories. In some states, including Ohio and Indiana, public
officials have ordered a new approach to funding, based not on how many
students enroll but on what they accomplish.

Continued in article

Jensen Comment
This case is one of the most difficult cases that managerial and cost
accountants will ever face. It deals with ugly problems where joint and indirect
costs are mind-boggling. For example, when producing mathematics graduates in
undergraduate and graduate programs, the mathematics department plays an even
bigger role in providing mathematics courses for other majors and minors on
campus. Furthermore, the mathematics faculty provides resources for internal
service to administration, external service to the mathematics profession and
the community, applied research, basic research, and on and on and on. Faculty
resources thus become joint product resources.

Furthermore costing faculty time is not exactly the same as costing the time
of a worker that adds a bumper to each car in an assembly line. While at home in
bed going to sleep or awakening in bed a mathematics professor might hit upon a
Eureka moment where time spent is more valuable than the whole previous lifetime
of that professor spent in working on campus. How do to factor in hours spent
in bed in CVP analysis and Cost-Benefit analysis? Work sampling and
time-motion studies used in factory systems just will not work well in academic
systems.

In Cost-Profit-Volume analysis the multi-product CPV model is
incomprehensible without making a totally unrealistic assumption that "sales
mix" parameters are constant for changing levels of volume. Without this
assumption for many "products" the solution to the CPV model blows our minds.

Another really complicating factor in CVP and C-B analysis are semi-fixed
costs that are constant over a certain time frame (such as a semester or a year
for adjunct employees) but variable over a longer horizon. Of course over
a very long horizon all fixed costs become variable, but this generally destroys
the benefit of a CVP analysis in the first place. One problem is that faculty
come in non-tenured adjunct, non-tenured tenure-track, and tenured varieties.

To complicate matters the sources of revenues in a university are complicated
and interactive. Revenues come from tuition, state support (if any), gifts and
endowment earnings, research grants, services such as surgeries in the medical
school, etc. Allocation of these revenues among divisions and departments is
generally quite arbitrary.

I could go on and on about why I would never attempt to do CVP or C-B
research for one of the largest universities of the world. But somebody at
Texas A&M has rushed in where angels fear to tread.

The traditional bookstore is doomed by e-readers
and online sales of hard copy books. I use the word “doomed” in the same
sense that online digital sales of movies and music have doomed movie rental
stores, movie theatres, and stores that sell albums of music. Doomed does
not mean that these stores will quickly, or ever fully, disappear, but that
they have received deadly blows from Internet competition.

Joseph Schumpeter, an outstanding economist in the
first half of the 20th century, originated the term “creative destruction”
to describe new technologies and other forms of new competition that wreak
havoc on older and established industries. The process is creative because
it provides consumers and producers with more effective ways of satisfying
their wants. The process is at the same time destructive because it greatly
reduces the value of services and products provided by older industries.

Extreme examples of creative destruction from the
20th century include the complete substitution of cars for horses and
buggies, movies with speaking for silent movies, and computers for
typewriters. Less extreme are the large reduction in clerical and
secretarial staffs caused by the development of computers and the Web, and
the sizable reduction in demand for milk and eggs induced by better
information on the health value of low cholesterol diets.

A similar creative destruction process began for
bookstores with Amazon’s development of online book sales that offered huge
inventories of books, convenience of purchase, speedy deliveries, online
reviews of books, and various other services that made it more efficient and
often cheaper to buy books online rather than in bookstores. Sales of books
online started slowly, but they have accelerated as consumers became more
familiar with the process of buying books (and other goods) online. I first
started using Amazon at my summer home since it is not near any bookstore.
Discovering the convenience of buying books online, I now buy online all
year, although I still enjoy visiting bookstores.

Effective online readers, like Amazon’s Kindle, and
Apple’s iPad, are only a few years old, but they have become big hits since
they can be used both to purchase books online, and to read books in digital
form. Hundreds of books can be stored digitally in a single Reader that
weighs less than a couple of pounds. They are especially valuable when
traveling, but are useful when reading in bed or eating, and also with
traditional reading when seated on a comfortable chair. They are
particularly useful for individuals with weak eyesight since print size can
be easily adjusted. This is why digital readers will appeal eventually even
more to older persons than to others, although mainly younger persons are
the ones who so far have bought digital readers because old persons are less
familiar with digitalization.

I do not expect bookstores to rapidly disappear the
way the production of silent movies virtually ceased once talking movies
were created. However, I do expect an accelerating decline in the number of
bookstores as many close down due to bankruptcy and excessive losses. Some
bookstores will continue to exist to cater to men and women who like to
browse among physical copies of books, and because some owners of bookstores
get great pleasure out of selling and being surrounded by books. Many
bookstores that survive are likely to combine selling hard copy books with
that of other products. For example, university bookstores usually also sell
clothing that have the university logo, computers, greeting cards, snacks
and coffee, and other goods that cater to students and faculty. Other
surviving bookstores might combine selling of hard copy books in physical
facilities with online sales of hard copy books, and online sales of digital
books.

The decline of bookstores, theatres, laundries, and
other retail industries with physical facilities illustrates a trend that
runs counter to older ideas about the effects of economic development. The
process of development has been presumed to cause a substitution of market
activities for home production. For example, households in poor rural
societies have not only grown their own food, but also made much of their
clothing, washed their clothes, baked their bread, and cooked from scratch
their other food. As countries underwent economic growth, many of these
productive activities left the home and migrated to the marketplace.
Factory-made clothing was substituted for clothing made at home, and
bakeries and laundries developed to make bread and sweets, and to wash,
clean, and dry clothes.

Further technological developments,however, such as
small motors used in home washing and drying machines, and small machines
that cooked bread easily at home, shifted many activities back into the
home, and thereby saved on time and energy spent in the shopping process.
The online digital revolution is a further major step in this trend of
returning activities to the home. Time and effort are saved, for example,
when instead of going to movie theatres, consumers both order and download
films online to be viewed at “home”, either on television sets, or
increasingly on computers.

From this perspective, what is happening to
bookstores is not unusual. “Books” are still read at “home”, but
increasingly they are also purchased at home, and not only in hard copy
form. Digital books are a true revolution, but their effects on bookstores
are only a small part of a broader technological development that has
brought important activities into the home.

SUMMARY: "Borders Group
Inc. ...has stopped writing checks to key suppliers [and] is expected to ask
publishers...to push back the due dates on bills as it works out a
refinancing plan...." Competitor Barnes & Noble Inc. and others question the
fairness of the possible change in terms by publishers for just one
customer.

CLASSROOM APPLICATION: The
article is useful to introduce the concept of payment terms in covering
accounts receivable and accounts payable in any level of accounting class.

QUESTIONS:
1. (Introductory) Based on your reading of the article, what are
the account terms offered by publishers to customers such as Borders Books
and Barnes & Noble?

2. (Introductory) Why is Borders is trying to renegotiate the terms
with publishers? What incentive does a publisher have to enter into these
negotiations?

3. (Advanced) What is the form of receivable for the publishers,
and payable for Borders, likely to be entered into if the publishers agree
to alter terms of their accounts receivable from Borders?

Jensen Comment
One question to pose to students is how much value added Borders provides
relative to the lower prices (possibly) and ease of finding books from such book
sources such as Amazon, Barnes & Noble, Google, etc.

Another question is how do Borders' IOUs differ from IOUs being doled out to
vendors supplying the states of Illionis, California, and others. The CBS Sixty
Minues show featured some of the many vendors of the State of Illinois who are
now mostly receiving IOUs instead of paymnets unless they can demonstrate
exceptional hardship caused by delayed payments.

With the market for municipal bonds tumbling,
cities, hospitals, schools and other public borrowers are scrambling to
refinance tens of billions of dollars of debt this year, another sign that
the once-safe market is under duress.

The muni bond market was hit with the latest wave
of bad news Thursday, prompting a selloff that sent the market to its lowest
level since the financial crisis. A New Jersey agency was forced to cut the
size of a bond issue by about 40% because of mediocre demand, and pay a
higher rate than expected. And mutual fund giant Vanguard Group shelved
plans for three new muni bond funds, citing market turmoil.

"We believe that this delay is prudent given the
high level of volatility in the municipal bond market," said Rebecca Katz,
spokeswoman for the nation's biggest fund company.

The market has fallen every day this week, and
investors have been net sellers of their holdings in municipal-bond mutual
funds for nine straight weeks, according to fund tracker Lipper FMI.

Yields on 30-year triple-A rated general obligation
bonds shot higher to 5.01% on Thursday, reflecting a spike in perceived
risk, according to Thomson Reuters Municipal Market Data. The last time
those bonds yielded 5% was Jan. 30, 2009, during the financial crisis.

Amid the selloff, public borrowers such as states
and utilities face a wave of refinancing stemming from deals cut mostly
during the crisis. The deals involved letters of credit from banks that were
designed to keep financing costs down for government entities in need of
cash.

Though the financing deals can be meant to last
decades, the letters of credit underpinning them are expiring sooner. That
could force the borrowers in many cases to pay higher interest rates or seek
guarantees at higher costs. For the weakest borrowers, new guarantees may
not be available and refinancing too costly. There are about $109 billion
worth of letters of credit and similar backstops expiring this year,
according to Bank of America Merrill Lynch. Some $53 billion in letters of
credit alone is expiring this year, according to Thomson Reuters.

"Municipalities may be hard-pressed to come up with
this money or refinance this debt," said Eric Friedland, a municipal analyst
at Fitch Ratings. The ratings firm is scouring to identify risks among
weaker municipalities that are seeking to renew these deals, and says it
could downgrade some.

The rollover rush stems from the credit crisis that
roiled the U.S. in 2008. Municipalities had issued so-called auction-rate
securities, instruments whose rates reset at weekly auctions. Amid the
credit crunch, buyers at these auctions vanished.

Many municipalities scrambled to convert the debt
into other instruments, including variable-rate demand obligations, which
are long-term bonds with interest rates that reset periodically. For a fee,
big banks guaranteed many of these deals.

These so-called letters of credit from banks
typically only last two or three years, leaving municipalities to refinance
the deals or obtain a new guarantee. The issuers expected to easily renew
the letters of credit.

But many of these letters of credit have become
much more expensive and scarce, state officials say, leaving them with
little choice but to try to refinance at a time when the broader muni market
is under pressure.

The short-term squeeze is unusual in the $2.9
trillion municipal bond market. Most debt is paid back over decades. And
state and local governments generally don't need to borrow money to fund
their daily operations. The long-term nature of the market is a key reason
why most experts don't see the problems with state and local government debt
spiraling into another financial crisis. Analysts say that many large states
and cities with good credit ratings have been able to roll over deals well
ahead of their expiration.

But there are parts of the market where short-term
cash crunches could emerge, leading municipalities to potentially default on
their debts. The risks could spill over to banks that backed bonds with the
letters of credit.

"This is one area of risk the market hasn't focused
on," said Frederick Cannon, a banking analyst at Keefe, Bruyette & Woods.
Mr. Cannon says it is difficult to determine banks' exact exposure to such
deals because they don't typically report them in their financial
statements.

Questions
Although all 50 states are in deep financial troubles, what state is in the
worst shape at the moment and is unable to pay its bills?
Hint: The state in deepest trouble is not California, although California is in
dire straights!

How did accountants hide the pending
disasters?

Watch the Video
This module on 60 Minutes on December 19 was one of the most worrisome episodes
I've ever watched
It appears that a huge number of cities and towns and some states will default
on bonds within12 months from now
"State Budgets: The Day of Reckoning Steve Kroft Reports On The Growing
Financial Woes States Are Facing," CBS Sixty Minutes, December 19, 2010 ---
http://www.cbsnews.com/stories/2010/12/19/60minutes/main7166220.shtml

The problem with that, according to Wall Street
analyst Meredith Whitney, is that no one really knows how deep the holes
are. She and her staff spent two years and thousands of man hours trying to
analyze the financial condition of the 15 largest states. She wanted to find
out if they would be able to pay back the money they've borrowed and what
kind of risk they pose to the $3 trillion municipal bond market, where state
and local governments go to finance their schools, highways, and other
projects.

"How accurate is the financial information that's
public on the states? And municipalities," Kroft asked.

"The lack of transparency with the state disclosure
is the worst I have ever seen," Whitney said. "Ultimately we have to use
what's publicly available data and a lot of it is as old as June 2008. So
that's before the financial collapse in the fall of 2008."

Whitney believes the states will find a way to
honor their debts, but she's afraid some local governments which depend on
their state for a third of their revenues will get squeezed as the states
are forced to tighten their belts. She's convinced that some cities and
counties will be unable to meet their obligations to municipal bond holders
who financed their debt. Earlier this year, the state of Pennsylvania had to
rescue the city of Harrisburg, its capital, from defaulting on hundreds of
millions of dollars in debt for an incinerator project.

"There's not a doubt in my mind that you will see a
spate of municipal bond defaults," Whitney predicted.

Asked how many is a "spate," Whitney said, "You
could see 50 sizeable defaults. Fifty to 100 sizeable defaults. More. This
will amount to hundreds of billions of dollars' worth of defaults."

Municipal bonds have long been considered to be
among the safest investments, bought by small investors saving for
retirement, and held in huge numbers by big banks. Even a few defaults could
affect the entire market. Right now the big bond rating agencies like
Standard & Poor's and Moody's, who got everything wrong in the housing
collapse, say there's no cause for concern, but Meredith Whitney doesn't
believe it.

"When individual investors look to people that are
supposed to know better, they're patted on the head and told, 'It's not
something you need to worry about.' It'll be something to worry about within
the next 12 months," she said.

No one is talking about it now, but the big test
will come this spring. That's when $160 billion in federal stimulus money,
that has helped states and local governments limp through the great
recession, will run out.

The states are going to need some more cash and
will almost certainly ask for another bailout. Only this time there are no
guarantees that Washington will ride to the rescue.

We aren't the first to see that the world has
changed and free market competition no longer produces benefits
as if by an invisible hand. Historian
Alfred Chandler described the change convincingly in his book
The Visible Hand. Writing in the 1970s,
Chandler described the growth of large industrial organizations in the early
20th century. Their emergence, he observed, marked a major new era in
capitalism, dividing its history into two phases. Before 1850 there was the
market economy, in which many players, engaged in something plausibly
resembling
perfect competition, collectively met demand
without any grand plan to do so. After 1850, the markedly different system
that he called managerial capitalism emerged.

One way to understand the difference is to reflect
on the most basic definition of an economy: it allocates resources to
fulfill desires. Beyond that, the rest is up for grabs. The difference
between Chandler's two eras was in the mechanism by which that allocation
happened. Under managerial capitalism, overall production was no longer
driven by market mechanisms; it was decided on by skilled managers in large
companies. The invisible hand was replaced by a visible one, belonging to a
John D. Rockefeller or Andrew Carnegie, operating deliberately and with
sufficient power and intent to change the shape of markets.

The change Chandler describes actually began as far
back as the industrial revolution, because that basically invented market
power. Before mass production, no organization had achieved or could achieve
the kind of scale the industrial revolution enabled. In the
beer industry, for example, it created the
capabilities to brew huge batches and ship beer over long distances —
creating the so-called "shipping" breweries that ultimately dominated an
industry that was once nothing but microbrew.

Today it is almost wholly the visible hand that
rocks the economy. Massive firms do not respond to consumption dynamics so
much as they shape them. They have the means to manufacture demand as well
as to serve it.

So here's the question: if competition is no longer
atomized, but is now titanic, does that mean that markets are no longer
truly competitive?

We would say so. We think when power is
concentrated in the hands of the few, the game gets friendlier on some
level. Consider that when there are 500 of us in some setting all pursuing
our own agendas, it's very difficult to get a consensus on anything. But
when there are just a few of us, we can come to some kind of agreement.

Let's say that happens, however implicitly (and we
do not claim that it is more than implicit ... except sometimes). What would
the agreement be? It seems clear that not one of those few bloated players
would be pounding the table for the establishment of a more competitive
marketplace. Individually,
they are committed to thwarting that.That might sound like an outrageous statement, but it
isn't at all. If you are a reader of management literature, as evidently you
are, you cannot have failed to encounter the phrase "sustainable competitive
advantage." This is what all managers in all firms aspire to — it is the
holy grail that lies at the end of the search for excellence, and the
promise of
Michael Porter's teachings. Its point is simple:
that a firm does best when it finds some way not only to prevail in the
current market with its current offering, but also to ensure that its
advantage is not purely temporary.

Sustainable competitive advantage, in other words,
is the tying of the Invisible Hand. In Adam Smith's world, whenever a
producer responded to a market opportunity with a uniquely valuable
proposition to buyers, it had the ability to enjoy excess profits. But
immediately, those excess profits would be spotted and coveted by other
producers, who would rush in with rival offerings. Faced with multiple
options, buyers would look for value differentials through lower pricing,
and the profits would rapidly be competed away. This, to a firm, is a horror
to be avoided: a buyer's market. The entire enterprise of management has
been to find a way around it.

To underscore the point: The invisible hand is the
enemy of sustainable competitive advantage — and any firm trying to gain a
sustainable competitive advantage is an enemy of the invisible hand.

When oligopolistic conditions exist, therefore,
where it is possible for a few major players to implicitly agree on how
business will be done, the agreement that is arrived at looks nothing like
constant, fierce competition. Rather, it's in all the leaders' interests to
maintain a stable market and profitable prices. Oligopoly permits mutual
understanding to develop, and then, because that understanding supports
premium profits, the players have an incentive to maintain the oligopoly.
Fat cats just don't fight like alley cats.

Okay, perhaps we should retract that last sentence,
because we can already feel the cats' backs getting up. That very phrase
"fat cats" was after all a lightning rod for the business community when
Barack Obama used it. "I did not run for office to
be helping out a bunch of, you know, fat-cat bankers on Wall Street," he
told CBS's 60 Minutes in mid December 2009. In the year following,
his administration was broadly accused of being hostile to business, not
only by its political rivals but by thoughtful executives like GE's Jeff Immelt.

But we're leaving it in, because it's important to
recognize when a knee-jerk response is happening, and when that reflex needs
to be called out, challenged, and changed. Please think about this with a
mind unclouded by what you think your politics are: it is not a necessity to
be on board with business interests to be a defender of free markets. In
fact, as we've been describing, the two are deeply at odds.

There is undeniably a common attitude in America
that to be pro-free market is to be pro-business, and vice versa. Routinely
we see defenders of American values reflexively taking the side of
corporations in policy disputes. But it's important to understand that,
while in the abstract corporate leaders are defenders of free markets, when
it comes to their own competitive settings, they would much rather sit well
above the fray.

Sometimes it's hard to understand what
self-described advocates of the free market do believe in since they so
often defend the rights of the company that already has market power to do
whatever it can to strengthen its position further. This is a point we
really feel strongly about: we give huge market power to large corporations
under the banner of free competition, when in fact what they are engaging in
is not competition. It is
pseudo competition.

Jensen Comment
When the monopoly of the regulated AT&T Bell System was broken up into Baby
Bells there was great hope for competition and innovation in the Baby Bell
system. But the Baby Bells afterwards coagulated into a virtual monopoly called
AT&T, which seems to be the natural trend in many industries having economies of
scale unless trust busters vigorously enforce anti-trust laws (which is seldom
the case). What saved the U.S. consumers somewhat was the advent of wireless
cell phone communications and the explosive growth of the Internet that allowed
new entrants into the communications industry and also restrained the giant
Communications Industry Union.

Unfortunately the many competitors in the cell phone industry are now being
driven out by an oligopoly of big smart giants and who compete as oligopolists
and not capitalists. Oligopoly competition generally coagulates into the Cournot
equilibrium magic number of three that can hardly be called capitalist
competition.

Question
Teaching Case: How well do your students understand the Fed?As we move into more fair value accounting, interest rate hedge accounting,
and financial risk reporting, accounting students need to know more about the
Fed?

SUMMARY: "The Federal
Reserve's net income surged to $80.9 billion in 2010, largely due to a boost
in earnings from securities it acquired during the financial crisis and its
aftermath, according to preliminary unaudited results the central bank
released Monday. Most of that income will go back to the U.S. treasury,
as....the Fed will transfer a record $78.4 billion to the Treasury
Department....a 65% increase over the $47.4 billion the Fed paid the
Treasury in 2009....The increase was due primarily to increased interest
income earned on securities holdings during 2010,' the Fed said in a
statement."

CLASSROOM APPLICATION: The
article is useful for students to understand that accounting for investments
applies beyond companies in a for-profit environment and that the recorded
profits on investments influence remittances into our U.S. Treasury
department.

2. (Advanced) Why is the income that the Federal Reserve has earned
on securities it acquired during the financial crisis so notable?

3. (Introductory) What does the Federal Reserve do with the income
it earns?

4. (Advanced) What does the author mean by the statement that "the
Fed super-sized its balance sheet..."?

5. (Advanced) How is it possible that "the Fed could still lose
money on the holdings" that currently are producing record profits? In your
answer, consider and describe the accounting for investments under U.S.
generally accepted accounting principles.

6. (Introductory) What will happen if the Fed ends up losing on the
remaining assets it holds from the steps it took during the financial
crisis?

The Federal Reserve's net income surged to $80.9
billion in 2010, largely due to a boost in earnings from securities it
acquired during the financial crisis and its aftermath, according to
preliminary unaudited results the central bank released Monday.

Most of that income will go back to the U.S.
Treasury, as is the Fed's custom. The Fed will transfer a record $78.4
billion to the Treasury Department, including income earned from interest on
bonds issued by the Treasury itself. It marks a 65% increase over the $47.4
billion the Fed paid the Treasury in 2009.

Fed officials said the bulk of the payments have
already been distributed to Treasury. "The increase was due primarily to
increased interest income earned on securities holdings during 2010," the
Fed said in a statement.

During the financial crisis, the Fed super-sized
its balance sheet by creating a slew of unprecedented, emergency programs
through which it bought securities and debts and lent to banks and other
firms. The Fed has been criticized for taking too many risks with taxpayer
money and putting itself in a position to rack up big losses.

So far, the Fed's lending and credit programs look
like a profitable effort. "I think from a purely fiscal point of view…this
is most likely to be beneficial, not harmful, to the government's financial
position," Federal Reserve Chairman Ben Bernanke said at a Capitol Hill
hearing last week. "Our cost of funds is very low, so the interest that we
are receiving, we are remitting back to the Treasury."

One can view the payments returned to Treasury on
interest from Treasury bonds as "interest that the Treasury didn't have to
pay the Chinese," he added.

The Fed's assets increased from less than $900
billion before the financial crisis to more than $2.4 trillion today. The
Fed could still lose money on the holdings.

For instance, if inflation rises and the central
bank needs to push interest rates higher, its own cost of funding would rise
and it could be forced to sell long-term government bonds at a loss. If that
were to happen, the Fed's remittances to the government would drop, or
possibly halt for some time. Central bank officials play down the risk.

The Fed said the estimated 2010 net income was
derived primarily from $76.2 billion in income from mortgage bonds and
Treasury debt. In 2009, it earned $48.8 billion from securities holdings,
Fed officials said on a conference call with reporters Monday.

The Fed said $7.1 billion in income came from
limited liability companies created during the financial crisis for
different rescues, including one holding commercial paper loans made by the
Fed and another holding assets from Bear Stearns. Another $2.1 billion in
interest income came from credit extended to American International Group
(AIG); $1.3 billion of dividends on preferred interests in AIA Aurora LLC
and ALICO Holdings LLC; and $800 million in interest income on loans
extended under the Term Asset-Backed Securities Loan Facility and loans to
depository institutions.

Two years ago we warned against concentrating all
of the risks in the credit-default swap (CDS) market inside a clearinghouse
called ICE Trust. Now it appears that even the managers of ICE Trust are
coming around to our point of view. A few days before Christmas, this
largest of CDS clearinghouses quietly withdrew its federal application to be
. . . a CDS clearinghouse.

Astounding as it may seem, the frenzied rule-making
ordered by the new Dodd-Frank law is sowing concern and confusion even among
the law's beneficiaries. The ICE Trust example is particularly instructive.
Clearinghouses operate in many financial markets and often serve a useful
purpose. Specifically, they stand behind every trade so that the two parties
to a transaction don't have to trust each other to make good on the deal.

A clearinghouse collects money from all
participants as a cost of membership and also collects margin based on
particular trades. The margin collected and the contributions from members
create a pot of money available in case a member, or members, default on
their obligations to the clearinghouse. On the chance that defaults are much
larger than anticipated, all members also agree to provide emergency capital
if the clearinghouse is in distress.

Though it must follow the guidance of a regulator,
a clearinghouse must nonetheless be adept at setting appropriate margin each
day. That isn't easy to do with many thinly traded CDS contracts, and it
must also be very careful to admit for membership only sound firms that are
unlikely to default and capable of providing assistance in times of stress.

In other words, clearing arrangements do not
eliminate risks; they transfer them from the two trading parties to the
clearinghouse. But the Obama Administration and the authors of Dodd-Frank
claimed to believe two things that aren't true: that the structure of the
derivatives market—as opposed to housing or monetary policies—was a root
cause of the financial crisis, and that clearinghouses would eliminate risk
from derivatives.

Truth be told, at least one of the bill's authors
understood that derivatives clearinghouses would not magically eliminate
risk, and that those risks might someday swamp a clearinghouse. Last May, we
noted that Senator Chris Dodd had added language providing clearinghouses
with emergency access to the Federal Reserve's discount window. The language
stuck and the Democrats' so-called reform of Wall Street fulfilled the dream
of every high-roller in the swaps market: taxpayer-backed derivatives
trading.

Dodd-Frank empowered regulators to tear up the
plumbing of this market while forcing much of the trading into these
taxpayer-backed clearinghouses. ICE Trust, born in 2008 at the behest of
Timothy Geithner's Federal Reserve Bank of New York, seemed poised to be
among the biggest winners. Having already cleared more than $14 trillion in
CDS trades under the old regime operated by the Fed, ICE planned to seek
immediate approval from its new regulator, the Commodity Futures Trading
Commission.

But two weeks ago, ICE rescinded its application to
the CFTC. The company would only say that "given the significant changes
proposed to the commission regulations" for derivatives-clearing
organizations, it decided to wait until it is required to come under CFTC
jurisdiction later this year.

An immediate seal of approval from the commission
would have allowed ICE to seek many new customers, so why would this company
want to leave money on the table?

Probably because ICE would have had to admit weaker
members into its clearinghouse. CFTC's new rules allow clearing members to
have less capital than they are required to hold under ICE's existing rules.
Even with taxpayer-backing, ICE really doesn't want to fail. But wait.
Wasn't the point of this whole regulatory adventure supposed to be about
reducing systemic risk?

That's certainly how it was sold when Congress was
debating the bill last year, flawed as the argument might have been. But
now, vested with new authority to remake the market, CFTC Chairman Gary
Gensler has veered into a kind of consumer-protection role, with industrial
companies in the Fortune 500 among the consumers. The theory goes like this:
If Mr. Gensler can elevate more financial firms into clearinghouse
membership, he will break the dominance of the large Wall Street banks, and
this will provide lower prices to those industrial consumers when they buy
derivatives to hedge their business risks.

It's striking how few of these industrial consumers
are demanding Mr. Gensler's protection, and most Americans probably assume
they're capable of protecting themselves. But Americans have reason to
wonder what any of this has to do with avoiding the next financial crisis.

Reducing the power of too-big-to-fail banks sounds
good to us. But taking away their taxpayer backing is the way to start,
rather than admitting more financial companies into the subsidy club.

My, how the year 2010 ended with a bang! First,
Attorney General Andrew Cuomo initiated a fraud suit against Ernst & Young,
and then the Financial Accounting Foundation named Leslie Seidman as the
chair of the FASB. These events culminate a return to power and prestige for
the investment banking industry, and we should salute the triumph of
banking.

Banks have not been so fortunate during the
previous five to ten years, when history was not so kind to them. But the
industry has fought back virulently both in direct and covert ways. They
employed the bully pulpit to argue the points they wished to advance, they
courted members of Congress and the White House, and they issued innuendo
after innuendo. And the battlefield shows their victory and the spoils they
have earned.

Recent troubles were in a sense triggered by the
CDO racketeering by the banking industry during the last five to ten years,
though I suppose I should be more genteel and call it the collapse of the
CDO business and the real estate market. More accurately, the mayhem goes
back at least to the days of Enron, when the bankers had to minimize the
damage caused by their enabling Lay and Skilling and their underlings to
commit accounting and securities frauds. Of course, it included many other
corporations, but part of the public relations battle was to focus the
dysfunctions exclusively on Enron, which allowed bankers and corporate
managers to claim it was just a few bad apples.

Even with Enron it was a battle, but the industry
mostly kept the casualties to a few fines and court settlements. It is a
minor miracle that the executives at Merrill Lynch avoided prison,
especially given the fraud involving the Nigerian barges.

More recently, when bankers were at the verge of
swallowing poison of their own making, they convinced members of Congress
and the White House that this was a societal problem, thus it would be just
and fair to rescue the banks from economic collapse because it would help
the common man. Amazingly the populace accepted such drivel and Washington
assisted them with massive bailouts. Such wealth transfers from the middle
class to the rich are unparalleled in history.

It is instructive that the banking industry was
able to convince many that the difficulties were actually systemic problems.
The beauty of this positioning is that it absolved the banks from most of
the blame for the catastrophe. Further, it is important to notice that the
bankers were able to push most of the flotsam and jetsam onto Lehman
Brothers alone, similar to their interpretation of the events of 2001-2002.
By focusing exclusively on Lehman Brothers, the spokesmen for the banks
could assert that the industry’s contribution to the 2008 downfall was
limited to a few bad apples at this one institution.

But, the bankers really showed their agility when
public opinion opposed the granting of colossal bonuses to top managers. The
industry first got cheap loans from the government as well as the ability to
unload so-called “toxic” assets as the idiots at the Fed paid top dollar for
the junk. Then the industry quickly paid off its debts to the federal
government, so the poor executives could enjoy the millions in bonuses.

Amid this posturing, some politicians wanted to
make sure the banks were solvent and devised stress tests to evaluate the
banks. The industry again displayed amazing dexterity by manipulating the
regulators so that they devised feeble stress tests that Lehman Brothers
could pass even after its bankruptcy. These felicitous results calmed the
public by relieving any fears that the banks were weak and illiquid. Even if
they were.

Bankers clamored against fair value accounting,
claiming that it was behind the 2008 collapse. That this is untrue is hardly
important. That the banks were gung ho in favor of fair value accounting
almost a decade ago when fair value gains added substantially to the banks’
income statement seems a curiosity lost on many observers. Bankers reversed
their position only when the gains turned into losses, and they have been
zealously against fair value accounting ever since. The work paid off when
the FASB on April 2, 2009 caved in to the demands of bankers and allowed
them favorable treatments to minimize any losses on their “toxic” assets.

And in this turmoil, it is remarkable that banks
have avoided any significant regulation of derivatives. The CDOs that got us
into this mess have been absolved by the priests within the bank industry
and their minions in Washington. Of course, it helps to have the Treasury
Secretary and the Fed Chairman in your back pockets.

Ethical Archives
Principally, problems arise when collections are seen as windfalls and brain
bling, rather than social and cultural responsibilities.
"So where, exactly, is Martin Luther King’s stuff?" by Cynthia Haven, The Book
Haven Blog, Stanford University, January 17, 2011 ---
http://bookhaven.stanford.edu/

Happy birthday, Martin Luther King Jr. But where’s
all your stuff?

The answer is a complicated one, and “a cautionary
tale,” according to Elena Danielson, author of The Ethical Archivist and
sometime contributor to the Book Haven.

Principally, problems arise when collections are
seen as windfalls and brain bling, rather than social and cultural
responsibilities.

Here’s Elena’s story: MLK got his PhD from Boston
University and met his future wife Coretta in Boston. The transfer of his
papers to Boston University began “by an exchange of letters, a once-common
practice.” King intended to make a loan or deposit, that would evolve into a
gift. The terms were never finalized.

After his assassination in 1968, the family
established the King Center in Atlanta. Most pre-1961 are in Boston; most
post-1961 papers are in Atlanta.

The problem is, Boston University isn’t a hotspot
for academic research on civil rights. Its special collection is famous for
collector the papers of Hollywood figures, who jostle with King on its
website.

That’s not all, of course: hundreds of letters and
bits of paper are all over the country, many held privately. For example,
Harry Belafonte had several major King documents. He tried to sell them at
public auction in 2008, but withdrew them under protest.

Coretta King tried to get Boston’s papers back,
beginning in 1987. Could a lawsuit be far behind? James O’Toole, an expert
archives witness, recommended consolidating the collection in Atlanta, and
testified that at least one item had been lost in Boston, and that the
university had not provided the appropriate levels of professional care.

Boston University won the case. “The decision was
narrowly based on property law that treated archives as objects, no
different from a dispute over the ownership of furniture,” Elena writes.

The situation worsened with Coretta King’s death in
2006. The estate put a large collection of King papers up for auction at
Sotheby’s – “The commodification of the King legacy directly threatened its
integrity,” Elena writes. Public outcry resulted in a $32 million fund to
keep the papers in Atlanta, housed at Morehouse College.

Believe it or not, this tangled story has kind of a
happy ending. There was another strand of activity: In 1985, Coretta King
asked Clayborne Carson of Stanford to edit King’s papers for publication.
The multi-volume edition brings together the scattered texts for researchers
– volume 1 came out in 1992, and several more have been published since (14
in all are planned).

Do you like open data? Do you like visual
representations? If so then you should give Freebase a look. With Freebase,
visitors can use all types of publicly available data to create "entities"
which will be connected and manipulated into a graph format. Freebase has
access to about 13 million entities, so interested parties have a tremendous
amount of material to choose from. Visitors can use the material on the
homepage to see what previous users have done with this data. This version
is compatible with all operating systems, including those running Linux.

As this is a New Year, there will be a need for new
presentations. SlideRocket makes pesky presentation troubles go away, as you
can access PowerPoint presentations from any locations, collaborate with
colleagues around the world, and also integrate dynamic data, charts, and
graphs quite seamlessly. Some of the more advanced features are only
available via the pay versions of the product, but the free version is easy
and engaging. This version is compatible with all operating systems,
including Linux.

Created by Dan Cohen for George Mason University's
Center for History and New Media, this helpful application will allow users
to create polls that they can embed in their web pages. Visitors can get
started by choosing a background color, and then go ahead and create a poll
with up to 5 possible responses. It's not a very flashy program, but it gets
the job done, and it is compatible with all operating systems, including
Linux.

Created by Andrew Tedstone, Photo Grabbr is a fine
way to download photo sets of note from Flickr accounts. If you are the type
of person that wants to take a closer glimpse at landscapes of Mongolia,
family gatherings in Moldova, or trips to Monrovia, you'll want to give this
handy application a look. This version is compatible with computers running
Mac OS X 10.4 and newer.

The key challenge for the scholarly community, in
which I include academic publishers such as Oxford University Press, is to
work actively with Wikipedia to strengthen its role in "pre-research." We
need to build stronger links from its entries to more advanced resources
that have been created and maintained by the academy.

It is not an easy task to overcome the prejudices
against Wikipedia in academic circles, but accomplishing that will serve us
all and solidify an important new layer of knowledge in the
online-information ecosystem. Wikipedia's first decade was marked by its
meteoric rise. Let's mark its second decade by its integration into the
formal research process.

Continued in article

Casper Grathwohl is vice president and publisher of digital and
reference content for Oxford University Press.

Ad*Access ---
http://library.duke.edu/digitalcollections/adaccess/
The Duke University Libraries has an extensive physical and online collection of
advertisements that appeared in magazines and newspapers in the U.S. and Canada
from 1911-1955. The Ad*Access collection focuses on advertisements in five main
subject areas: Radio, Television, Transportation, Beauty and Hygiene, and World
War II.

Abstract:
This paper
analyzes gender-differences with respect to microfinance repayment-rates
using a large global dataset covering 350 Microfinance Institutions (MFIs)
in 70 countries. The results indicate that more women clients is associated
with lower portfolio-at-risk, lower write-offs, and lower credit-loss
provisions, ceteris paribus. These findings confirm common believes that
women in general are a better credit-risk for MFIs. Interaction effects
reveal that the effect is stronger for NGOs, individual-based lenders,
‘finance plus’-providers and regulated MFIs. This indicates that two types
of MFIs benefit more than others from focussing on women: First, those MFIs
that develop hands-on, women-friendly procedures tailored to individual
women’s need, and Second, those MFIs that apply coercive enforcement methods
to which women are more responsive.

Ferguson finds galling both government apathy in
regulating and in prosecuting high-end white collar crime, but perceives the
reason: a financial services industry that “as it rapidly consolidated and
concentrated became the dominant source not only of corporate profits but
campaign contributions and political funding in the U.S.” Evidence for
unrestrained financial power lies in the fact that the government response
to the crisis has been engineered by Wall Street insiders intent on shoring
up firms too big to fail. Ferguson cites as well “corruption of the
economics discipline,” the rising role of money in politics, and the
increasing concentration of wealth in the hands of a few.

The dominance of a single industry constitutes a
deep change and danger for America, believes Ferguson. The nation “has
evolved a political duopoly where two political parties agree on things
related to finance and money.” Without a political structure immune to such
influence, Ferguson sees little likelihood of challenging the interests of
the financial giants.

Ad*Access ---
http://library.duke.edu/digitalcollections/adaccess/
The Duke University Libraries has an extensive physical and online collection of
advertisements that appeared in magazines and newspapers in the U.S. and Canada
from 1911-1955. The Ad*Access collection focuses on advertisements in five main
subject areas: Radio, Television, Transportation, Beauty and Hygiene, and World
War II.

Questions about "The Zone"
Why do some slot machine addicts get angry when they are interrupted in "The
Zone" by winning a jackpot?
Why are slot machines preferred by some addicts that know slots offer the worst
odds in the casinos?

Lesley Stahl reports on the proliferation of gambling to 38 states and its
main attraction, the slot machine, newer versions of which some scientists
believe may addict their players. By the way, on "The T" means a suburban train
in and out of Boston.

Jensen Comment
Until I became stranded in Bangor, Maine on December 26 during one of the worst
snow blizzards of the decade, I was not even aware that Bangor (where I lived
for a decade years ago) even had a a casino to accompany its horse racing. Erika
and I were stranded in the truly beautiful seven-story Hollywood Slots Hotel in
Bangor while our car was tucked safely out of the snow storm in a huge new
parking garage.

Even though we stayed in this hotel for three nights I really did not enter
the casino part of the hotel. Hence I don't really know if I could become
addicted to "The Zone" that is connected to brain chemical addictions. I don't
think I could become an addict to slot machines, but who knows? The brain is a
very mysterious part of our bodies.

Forwarded by Cousin Dick

St. Patrick's Day

The reason the Irish celebrate St. Patrick's Day is because this is when St.
Patrick drove the Norwegians out of Ireland.

It seems that some centuries ago, many Norwegians came to Ireland to escape
the bitterness of the Norwegian winter. Ireland was having a famine at the time,
and food was scarce. The Norwegians were eating almost all the fish caught in
the area, leaving the Irish with nothing to eat but potatoes. St. Patrick,
taking matters into his own hands, as most Irishmen do, decided the Norwegians
had to go.

Secretly, he organized the Irish IRATRION (Irish Republican Army to Rid
Ireland of Norwegians). Irish members of IRATRION passed a law in Ireland that
prohibited merchants from selling ice boxes or ice to the Norwegians, in hopes
that their fish would spoil. This would force the Norwegians to flee to a colder
climate where their fish would keep.

Well, the fish spoiled, all right, but the Norwegians, as every one knows
today, thrive on spoiled fish. So, faced with failure, the desperate Irishmen
sneaked into the Norwegian fish storage caves in the dead of night and sprinkled
the rotten fish with lye, hoping to poison the Norwegian invaders.

But, as everyone knows, the Norwegians thought this only added to the flavor
of the fish, and they liked it so much they decided to call it "lutefisk", which
is Norwegian for "luscious fish".

Matters became even worse for the Irishmen when the Norwegians started taking
over the Irish potato crop and making something called "lefse".

Poor St. Patrick was at his wit's end, and finally on March 17th, he blew his
top and told all the Norwegians to "GO TO HELL". So they all got in their boats
and emigrated to Wisconsin or Minnesota---- the only other paradise on earth
where smelly fish, old potatoes and plenty of cold weather can be found in
abundance.

Forwarded by Paula

A paraprosdokian sentence consists of two parts
(sometimes three) where the first is a figure of speech and the second an
intriguing variation of the first. They're used typically for humorous or
dramatic effect. Enjoy these!Never argue with
an idiot. He'll drag you down to his level and beat you with experience.Going to church
doesn't make you a Christian any more than standing in a garage makes you a car.The last thing I
want to do is hurt you. But it's still on the list.If I agreed with
you we'd both be wrong.We never really
grow up, we only learn how to act in public.Knowledge is knowing a tomato is a fruit;
Wisdom is not putting it in a fruit salad.The early bird
might get the worm, but the second mouse gets the cheese.How is it one
careless match can start a forest fire, but it takes a whole box to start a
campfire?Dolphins are so
smart that within a few weeks of captivity, they can train people to stand at
the edge of a pool and throw fish.I didn't say it was your fault, I said I was
blaming you.Women will never
be equal to men till they can walk down the street with a bald head and a beer
gut and still think they're sexy.A clear conscience is usually the sign of a
bad memory.You don't need a
parachute to skydive, but you do need one to skydive again.The voices in my
head may be fake, but they have good ideas!Hospitality is making your guests feel like
they're at home, even if you wish they were.I scream the same way whether I'm about to be
eaten by a shark or seaweed touches my foot.Some cause happiness wherever they go, others
whenever they go.There's a fine line between cuddling and
holding someone down so they can't get away.You're never too old to learn something
stupid.

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